Should You Buy the Rental Car Company's Coverage?
More often than you'd expect, yes — and I say that as someone who sells insurance for a living and makes nothing if you buy theirs.
This is a different question from whether your policy covers a rental car. If you call and ask me whether you're covered, I'll tell you straight: if you carry collision and comprehensive, your policy usually extends to a rental here in the US. That depends on your policy, your carrier and your state, which is why I'd rather read yours than guess. But whether you should use that coverage is a separate decision, and it's the one nobody explains at the counter.
First, the real number
In New York, state law caps what a rental company can charge for its damage waiver. General Business Law § 396-z sets the cap per rental day at $9 for a car with a list price up to $20,000, $12 up to $35,000 and $15 up to $50,000. Above $50,000 there is no cap. On a week away that is up to about $63, $84 or $105. The cap covers rentals from locations in New York. Rent somewhere else and the price is whatever that company charges, so ask for the daily rate in writing before you sign.
That's real money and I'm not going to pretend otherwise. It's exactly why the decision deserves a minute of thought before you're standing at a counter after a flight.
Theirs, yours, or your card: what each one actually does
Three things can pay for a damaged rental in the US. They do not do the same job, and only one of them, used as intended, keeps the event away from your own insurer.
The counter's waiver | Your own auto policy | Your credit card | |
|---|---|---|---|
What it costs | In New York, capped at $9 to $15 a day on cars up to $50,000 list price | Already paid for | Included with the card |
Damage to the rental | Yes, under the terms of the rental agreement | Usually, at your own limits and your own deductible | Usually, if you decline the counter's waiver and pay the full rental on that card. New York terms can differ (see below) |
Loss of use, towing, admin fees | Commonly included | Often not, or not in full | Varies by card, check the guide |
If you injure somebody | Sold separately at the counter | Usually, at your liability limits | Generally not. American Express's guide lists it as not covered |
Your deductible | Usually none | You pay it | May reimburse it afterwards |
Does a claim reach your insurer | Not if the waiver applies | Yes | Yes. In the US these benefits are usually secondary, so your policy goes first |
Moving truck or 12+ passenger van | Yes | Likely not | Commonly excluded |
On the fees column, the Insurance Information Institute notes the counter's waiver "may also provide coverage for 'loss of use,' in the event the rental car company charges for the time a damaged car cannot be used because it is being fixed, as well as towing and administrative fees." Your own policy may not, or not fully. On the last row, its guidance on moving says collision and comprehensive "likely will not transfer to a non-owned moving van, only to a private passenger vehicle."
Read down the second-to-last row. That is the one this whole article is about.
Why I often say take it anyway
I worked for a major rental car company for about seven years while I was at school, so I've been on the other side of that counter. Two things from that experience stay with me.
The inspection isn't what you think it is. Where I worked, staff weren't trained to inspect a vehicle properly. Damage already on that car doesn't reliably get spotted — by them or by you, in a hurry, in a parking lot, with a plane to catch. If it's missed, it becomes yours.
You lose a choice you normally have. This is the part most people never consider. On your own car, if you get a small ding, you have options. You might not fix it. You might decide it isn't worth putting a claim on your policy and just pay out of pocket. That's your call.
With a rental, if you declined their coverage, you largely lose that call. In my experience the rental company will usually file a claim with your insurance company, and you don't choose. And if you were relying on a credit card, remember that card coverage is typically secondary, so it may reimburse your deductible afterwards, but the claim usually still goes to your insurer first. How it is recorded, and whether it affects what you pay, depends on your carrier and your state.
That's the thing I want people to understand. It isn't really about the money. It's about giving up control over whether a claim gets filed at all.
So what do I actually tell clients?
For a week-long trip costing around $100, I take their coverage. That is my honest answer, and it is what I would do with my own family's policy.
It does depend on your budget and your situation, and I'm not going to pretend there's one answer for everybody. But if I'm going away for a week and it's going to cost me around $100, I wouldn't put a claim on my own policy over it. I'd take theirs and hand the whole problem back to them if anything happened.
When I'd decline it
You're renting a normal passenger car, in the US, for a personal trip. You carry collision and comprehensive. The deductible is a number you could write a check for tomorrow and a claim on your record genuinely wouldn't bother you. In that case, decline it, put the rental on a card with benefits, and keep the money.
One caution if you're leaning on the card: it almost always requires you to decline the counter's waiver and pay for the entire rental on that card. Buy their full waiver and you generally cannot claim on the card's. Worth knowing that Amex writes separate terms for New York residents, which list paying for a partial waiver as an alternative to declining the full one. It is one of three conditions, not a loophole. Ask which you are being offered. More on what cards actually do here.
And if you're renting a 12 or 15-passenger van, a moving truck, or anything exotic — take their coverage. Those vehicles fall outside a lot of personal policies and card benefits regardless of how good your coverage is.
For New York drivers
Know your own liability number. New York State DMV, as of October 2026, sets the legal minimum for most vehicles at $10,000 for property damage in a single crash. For bodily injury it is $25,000 per person and $50,000 for death of a person, rising to $50,000 and $100,000 where two or more people are involved. If you injure somebody, what matters is the liability that actually applies to your trip.
Rental companies have a floor of their own. In Second Child v Edge Auto, decided April 23, 2026, the New York Court of Appeals held that "section 370's requirement that rental car companies carry a specified minimum amount of insurance is not preempted". The same decision held that federal law overrides the part of New York's rental-car law that had required those companies to provide primary liability coverage to the people renting from them. The court's page notes the decision is uncorrected and subject to revision before publication in the Official Reports.
So a rental company has to carry a minimum, but their insurance may not be what answers if you hurt someone. Ask the counter what their waiver covers and what it leaves out, and read your own declarations page before you book.
That's worth a conversation about your limits generally — most Long Island families I work with are carrying less liability than they think.
Trip coming up? Call or text me before you book and I'll tell you exactly where your policy stands and what I'd do in your situation. Two minutes on the phone beats a decision made at a counter after a flight.
This is general information about how personal auto policies commonly work. It is not a description of your policy, and it is not advice about your coverage. Coverage varies by policy, carrier and state. Read your own policy — or call us and we'll read it with you.
