Car rentals & your insurance

Q: Should I buy the insurance that a rental car company offers to protect myself against liability for damage to the rented vehicle in the event of an accident?

A: New York state law prohibits the sale of such insurance on vehicles rented within the state. It also prohibits the rental company from holding you liable for more than a $100 deductible, except for a few limited cases, such as driving while under the influence of alcohol.

Q: Should I buy the insurance if I rent a car outside of New York State?

A: It’s not necessary, as long as you have a New York auto insurance policy on your own car. By law, a New York driver’s auto insurance policy covers them against loss or damage to a rental vehicle (including the above-mentioned $100 deductible). Although rental vehicle coverage under a New York auto insurance policy also extends to the rest of the United States and its territories and Canada, complications may arise when New Yorkers rent cars out of state. Vacationers have returned from Florida with horror stories of rental car representatives who express ignorance of New York laws and threaten to block the credit card (by as much as $1,000) of anyone refusing to purchase the insurance.

These are idle threats, according to representatives of major U.S. credit card companies. Visa, MasterCard and American Express do not allow rental car firms to impair a cardholder’s credit limits by imposing blocks.

Q: What if I don’t own a car and, therefore, don’t have an auto insurance policy to cover the rented car?

A: If you have no other insurance available, then you may want to purchase the insurance suggested by the rental car company. However, if you are using a major credit card, rental car coverage may be available through the credit card company. Most major credit card companies provide such coverage with their
credit cards.

Typically, the coverage is secondary to a cardholder’s own auto insurance policy within the United States, and primary overseas. This coverage is generally in effect for daily or weekly car rentals only, not on a long-term lease basis. Check with your credit card company for details.

Q: What should I do if the rental vehicle becomes damaged?

A: First, be sure to check the cares condition prior to driving it. If it is already damaged, inform the rental car company. If damage occurs after you rent the vehicle, do not allow the rental car company to charge such damages to your credit card. If you are involved in an accident or suffer a loss, contact your insurance provider, either your insurance agent or (if you have no auto insurance) your credit card company, as soon as possible. This is important because the company providing the coverage needs time to inspect the vehicle and to be sure that all repair charges imposed by the rental car firm are proper and reasonable.

Q: Should I buy the personal injury, property liability or medical coverage options that the rental car agency offers?

A: You should only buy it if you have some reason for wanting more coverage than you ordinarily carry. Remember, the coverage’s on your New York auto insurance policy apply when you rent a car for brief periods. People who do not have a New York auto policy may want to purchase these coverage’s when renting a car.