Do I Need to Purchase Rental Car Insurance?

Car Rental Sign

When renting a car, a question that that often arises is whether you need to purchase rental car insurance. Rental car insurance can add a significant cost to your rental, but is it a necessary expense? Here are some important things to know:

For those who are Insured on a Personal Auto Insurance policy, coverage for a rental car is included whether or not you have comprehensive or collision coverage.


Understanding the NYS Rental Vehicle Coverage Endorsement

Section 3440 of the New York State Insurance Law addresses the Rental Vehicle Coverage Endorsement, which provides additional coverage for rental vehicles and is designed to protect policyholders who rent cars when their personal auto insurance policy doesn’t fully cover such rentals.

Section 3440 of the New York State Insurance Law:

(b) Subject to subsection (d) of this section, every motor vehicle liability insurance policy which insures less than five private passenger motor vehicles registered in this state shall by endorsement, provide coverage for the obligation of the insured for actual damage to, or loss of, vehicles (including loss of use) rented by an insured in the United States, its territories or possessions and Canada under a rental agreement with a term of thirty continuous days or less, regardless of where within those areas such rental vehicle is registered, rented, or operated, subject to such maximum coverage limitations as the superintendent may by regulation prescribe or any other applicable limits in the policy, whichever is higher.


Check Your Policy For Details

Here are the key features and details of the Rental Vehicle Coverage Endorsement that your policy will address:

  • Coverage for Damage to Rental Vehicles: The Rental Vehicle Coverage Endorsement typically covers the cost of damage to a rental vehicle in the event of an accident, theft, or vandalism. It may also cover the loss of use charges that the rental car company imposes while the vehicle is being repaired or replaced.
  • Exclusions and Limitations: Be sure to read the fine print of the endorsement. Certain exclusions and limitations may apply, such as coverage limitations for specific types of rental vehicles, the length of the rental period, or certain geographical areas.


When to Consider Rental Vehicle Coverage from Rental Companies

It’s worth noting that many rental car companies offer their own insurance options at the rental counter. While these options may provide coverage, they can be expensive and might include certain terms and conditions that you should carefully consider.

  • Renting a car outside of your policy’s “operating territory” – All coverage is excluded while renting a car outside of the United States, its territories and possessions, Puerto Rico and Canada.
  • Coverage is only applicable for rental agreements that are less than 30 days.
  • Claims – a claim payment for a rental car is considered a loss under the Auto Policy’s Liability coverage part. Rental vehicle losses can negatively affect safe driver and claims free discounts. Some at-fault losses can also result in a surcharge.

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.  Again, 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.

Use this helpful reference to help you make the decision that works best for you. 


Credit Card Coverage

Another potential source of coverage when renting a car is your credit card. Some credit cards offer rental car insurance as a benefit. However, the coverage can vary significantly from one card to another. Review your credit card’s terms and conditions to see if rental car insurance is included and understand the specific coverage limits and conditions.


Walsh Duffield is Here to Support You

In conclusion, If you live in NYS, your personal auto policy will provide coverage for damage to rental vehicles and liability protection when driving those cars. However, it’s essential to review your policy and consider your specific rental needs before deciding whether to purchase additional coverage.  Contact the Walsh Duffield personal insurance team if you have any questions or if you would like to review your existing auto insurance plan.








The above description provides a brief overview of the term and phrases used within the insurance industry. These definitions are not applicable in all states or for all insurance and financial products. This is not an insurance contract. Other terms, conditions and exclusions apply. Please read your official policy or full details about coverage. These definitions do not alter or modify the terms of any insurance contract. If there is any conflict between these definitions and the provisions of the applicable insurance policy, the terms of the policy control.