As agents, one of the most common questions we receive from customers is “I am renting a car, am I covered under my auto insurance or do I need to buy the optional vehicle protection from the rental car company?” Luckily, for most of our insured’s, coverage is provided under their auto insurance policy, as most motor vehicle liability policies in New York State include rental vehicle coverage. In order for coverage to be included the policy must insure less than five vehicles and must be issued to an individual or husband and wife. There are a few circumstances in which rental vehicle coverage might not be included, for example, on policies insuring certain types of vehicles. When coverage is included it is provided through a separate rental vehicle coverage endorsement. The rental vehicle coverage endorsement provides coverage for the actual damage to, or loss of, a rental vehicle, including loss of use.
Many people think they only have this coverage if their policy includes comprehensive and collision coverage as this is the coverage on a policy that covers damage to or loss of a motor vehicle you insure. The rental vehicle coverage endorsement is included on policies even if they do not have physical damage(comprehensive and collision) coverage. Another interesting fact about the rental vehicle coverage endorsement is that coverage is not limited to the insured’s property damage liability limit. Therefore, if someone only has $10,000 of property damage coverage (minimum requirement in New York State) but causes $20,000 of damage to a rental vehicle, the total amount of damage is still covered.
In New York State, rental vehicle companies are required to insure their rental vehicles for the minimum amount of liability protection required by law. Your liability protection and no fault coverage will cover you while driving a rental vehicle but only in excess of the coverage the rental car company carries. Sometimes additional liability protection can be purchased through the rental car company directly if desired as well.
If you do not have a motor vehicle liability policy and are renting a car you should check with your credit card company as many credit card companies offer coverage for damage to rental vehicles. Typically you are required to pay for the rental vehicle with that credit card in order for the coverage to be provided. The coverage provided by the credit card company is usually only for damage to the rental vehicle and doesn’t provide any additional liability protection. If you do not have a motor vehicle liability policy and rent vehicles often you can purchase a “Non-owned Automobile Liability Policy” for limits higher than the minimum state requirements which would then provide you with excess liability protection.
Although in most circumstances you are covered through your auto insurance it may be worth considering purchasing the optional vehicle protection from the rental car company so that any claims will be settled directly with the rental company as opposed to going through your insurance company. Any claims filed through your own insurance company, even if they occur with a rental vehicle, could have an impact on your own insurance policy and potentially your premium.
As with all coverage it is recommended you read your policy carefully so you understand what coverage is provided and any exclusions that may apply. If you ever have any questions regarding rental vehicle coverage our experienced staff is always available to help.