Short answer: In California, a rental company can't force you to buy its damage waiver (Civ. Code §1939.13). If you decline it, the most you can be held to is set by law: collision damage up to the car's fair market value, theft only if you failed to use ordinary care, and repair costs capped at parts, labor and fees the law allows (§§1939.03, 1939.05). If you buy the waiver, it generally means you owe nothing for damage, with a short list of legal exceptions (§1939.09).
What you can be charged if you decline the waiver
Under Civ. Code §1939.03, you and the rental company can agree that you're responsible for no more than:
- Collision damage up to the car's fair market value, regardless of cause.
- Theft up to fair market value, only if the company proves by clear and convincing evidence that you or an authorized driver didn't use ordinary care. You're presumed not liable if you return the key and report the theft to police within 24 hours of learning of it.
- Vandalism unrelated to a theft: up to $500.
- Towing, storage and impound fees the company actually paid, and an administrative charge.
Section 1939.05 caps the damage bill at estimated parts and labor at the rates the company usually pays, plus towing and storage, minus any discounts it gets. The administrative charge can't exceed $50 for repairs over $100 up to $500, $100 for over $500 up to $1,500, and $150 above $1,500, and there's none if repairs are $100 or less.
What a damage waiver does
Under Civ. Code §1939.09, a damage waiver means you have no liability for damage, loss, loss of use or related costs. The rental contract can exclude only listed situations, such as reckless or intentional conduct, DUI, towing, damage caused by unpaved road conditions, commercial hire, an unauthorized driver, driving outside the U.S., or fraudulent information.
The company must disclose in writing and on signs that your own auto policy or credit card may already cover some of this, and staff must tell most renters out loud that the waiver may duplicate their own coverage.
Your rights at the counter
Section 1939.13 says a rental company can't require you to buy the damage waiver or optional insurance. It also can't pressure you by refusing your reservation, limiting cars, or requiring a deposit or credit card hold because you declined.
Before you rent
- Call your insurer. Ask whether your collision and comprehensive coverage extends to rental cars, and what your deductible is.
- Check your credit card's rental benefits. Some are secondary to your own insurance.
- Photograph the car at pickup and return.
- Report a theft to police within 24 hours of learning about it.
See also the state insurance rules hub.
Frequently asked questions
Do I have to buy the rental company's damage waiver in California?
No. Civil Code §1939.13 bars rental companies from requiring it or pressuring you with deposits or holds if you decline.
What's the most a rental company can charge for damage in California?
Collision damage up to the car's fair market value, with repair costs capped under §1939.05, plus towing and storage fees and an administrative charge of no more than $150.
Am I liable if a rental car is stolen in California?
Only if the company proves you didn't use ordinary care. You're presumed not liable if you return the key and report the theft to police within 24 hours of learning of it.
Does my own car insurance cover a rental?
Often your collision and comprehensive coverage extends to a rental car, subject to your deductible, but policies differ. Ask your insurer before you rent.
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. Not legal, tax or financial advice, and not a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.