Every car rented in Minnesota comes with a piece of paper the rental company would rather you didn’t read. The Legislature wrote it. It has to be attached to your contract, in bold type, and it says, more or less, that you probably don’t need the collision damage waiver the person behind the counter is about to offer you.
Then the counter has to get your written acknowledgment that you read it and understood it. Only then can it sell you the waiver.
It’s easy to sign it without a glance. Here’s what it says, why it’s there, and the handful of situations where the waiver actually earns its price.
What does the form at the rental counter have to say?
Minn. Stat. § 65B.49, subd. 5a(f) says that “[w]hen a motor vehicle is rented in this state,” a separate form has to be attached to the rental contract, “in at least 10-point bold type, if printed, or in capital letters, if typewritten”. The Legislature wrote the text itself:
“Under Minnesota law, a personal automobile insurance policy must: (1) cover the rental of this motor vehicle against damage to the vehicle and against loss of use of the vehicle; and (2) extend the policy’s basic economic loss benefits, residual liability insurance, and uninsured and underinsured motorist coverages to the operation or use of a rented motor vehicle. Therefore, purchase of any collision damage waiver or similar insurance affected in this rental contract is not necessary. In addition, purchase of any additional liability insurance is not necessary if your policy was issued in Minnesota unless you wish to have coverage for liability that exceeds the amount specified in your personal automobile insurance policy.”
— Minn. Stat. § 65B.49, subd. 5a(f)
And the next sentence is the one with teeth:
No collision damage waiver or other insurance offered as part of or in conjunction with a rental of a motor vehicle may be sold unless the person renting the vehicle provides a written acknowledgment that the above consumer protection notice has been read and understood.
— Minn. Stat. § 65B.49, subd. 5a(f)
So the sequence the statute sets is notice, then your written acknowledgment, then the sale. Not the other way around, and not a box pre-checked on a tablet you were handed with the keys.
It’s a strange piece of retail. A business has to give you a government-written warning that its own add-on is “not necessary”, and then sell it to you anyway. The waiver is still legal. Nobody’s barred from buying one. The Legislature just decided, back in 1987, that you should hear the other side of the pitch first. The first version said a waiver “may not be necessary”. A year later the Legislature changed it to “is not necessary”. 1987 Minn. Laws ch. 337, § 106; 1988 Minn. Laws ch. 611, § 2.
What does my own auto policy have to cover on a rental?
More than most people assume. Paragraph (a) requires every “plan of reparation security” (that’s the No-Fault Act’s name for your auto policy) insuring a natural person and covering private passenger vehicles, pickups, and vans to do two things:
(1) provide that all of the obligation for damage and loss of use to a rented private passenger vehicle, including pickup trucks and vans as defined under section 168.002, and rented trucks with a registered gross vehicle weight of 26,000 pounds or less would be covered by the property damage liability portion of the plan; and (2) extend the plan’s basic economic loss benefits, residual liability insurance, and uninsured and underinsured motorist coverages to the operation or use of the rented motor vehicle.
— Minn. Stat. § 65B.49, subd. 5a(a)
Three more sentences in the same paragraph matter. “The obligation of the plan must not be contingent on fault or negligence.” So it doesn’t matter whether you backed into the pole or somebody sideswiped the car in a hotel lot. And there’s a floor: “In all cases where the plan’s property damage liability coverage is less than $35,000, the coverage available under the subdivision must be $35,000.” Minnesota’s minimum property damage liability limit is $10,000, § 65B.49, subd. 3(1), so even a bare-minimum policy carries $35,000 for the rental car.
Notice where the Legislature put the rental-car coverage: in property damage liability. Not collision. Not comprehensive. That’s a deliberate choice, and it has a consequence that surprises people.
A liability-only policy still covers the rental car
Lots of people drop collision coverage on an older car and keep liability only. They figure that means they have no coverage for damage to a rental. On the statute’s words, that’s wrong. The rental-car obligation rides on the property damage liability portion of the policy, which every Minnesota policy has to carry. If your policy insures you as a natural person and covers a private passenger car, pickup, or van, paragraph (a) applies to it whether or not you bought collision. I haven’t found a published decision applying that reading, so the statute’s words are what you have.
What about my deductible?
The statute doesn’t say. And that’s a change worth knowing about. When the Legislature first wrote this subdivision in 1987, it sent the rental car to “the collision or comprehensive portion of the plan” and added that “any deductible will not apply to claims that arise while a motor vehicle is being rented by a named insured.” In 1988 it struck both of those and moved the coverage to the property damage liability portion of the plan, which is where it’s been ever since. 1988 Minn. Laws ch. 611, § 2. There’s no deductible sentence in the current text. Whether anything comes out of your pocket is a question about how your policy writes its property damage liability coverage, not something subdivision 5a answers.
Which rentals count?
The statute has a specific idea of “rented”. Under paragraph (b), a vehicle is rented “if the rate for the use of the vehicle is determined on a monthly, weekly, or daily basis”, and also “during the time that a vehicle is loaned as a replacement for a vehicle being serviced or repaired regardless of whether the customer is charged a fee for the use of the vehicle.” So the free loaner from the dealership while your car’s in the shop counts.
Two things knock a vehicle out. It isn’t rented if the rate is set “on a period longer than one month or if the term of the rental agreement is longer than one month.” And it isn’t rented “if the rental agreement has a purchase or buyout option or otherwise functions as a substitute for purchase of the vehicle.” Rent-to-own and long-term leases are a different animal.
On the vehicle side, paragraph (a) reaches rented private passenger vehicles, pickups and vans, and “rented trucks with a registered gross vehicle weight of 26,000 pounds or less”. If you’re renting a moving truck, that registered weight is the number that decides whether your own policy follows you into it.
And paragraph (a) has a few exclusions. It “does not apply to plans of reparation security covering only motor vehicles registered under section 168.10, subdivision 1a, 1b, 1c, or 1d, or recreational vehicles as defined under section 168.002.” Those four subdivisions of § 168.10 are the collector’s-vehicle plates: pioneer, classic car, collector, and street rod. If the only thing your policy covers is a collector car, this subdivision doesn’t help you.
Does it matter where I rent?
For the coverage, nothing in paragraph (a) limits it to a car rented in Minnesota. In 2007 the Legislature added the words “wherever issued” to describe the policies it covers. 2007 Minn. Laws ch. 72, § 1. The notice is different. Paragraph (f) applies “[w]hen a motor vehicle is rented in this state”. So if you rent at the Phoenix airport, the Arizona counter owes you no Minnesota notice, but on the statute’s words your Minnesota policy’s rental-car coverage doesn’t stay home.
What about a Turo car?
Subdivision 5a doesn’t mention peer-to-peer car sharing, and chapter 65B has no section on it. The closest thing in the chapter is § 65B.472, and that’s for rideshare drivers working for an app company, which I covered at /news/minnesota-rideshare-crash-insurance-65b-472/. On its words, a car booked at a daily rate fits paragraph (b)’s definition of “rented”. Whether a court would treat a booking through a car-sharing app as a rental under subdivision 5a, I couldn’t find a Minnesota decision saying either way. Read the platform’s own protection terms and call your insurer before you book.
So what is a “collision damage waiver,” legally?
Legally, it’s a promise not to come after you. Minnesota defines it in the same section that regulates the insurance products sold at the counter:
A “collision damage waiver” is a discharge of the responsibility of the renter or lessee to return the motor vehicle in the same condition as when it was first rented. The waiver is a full and complete discharge of the responsibility to return the vehicle in the same condition as when it was first rented. The waiver may not contain any exclusions except those approved by the commissioner.
— Minn. Stat. § 72A.125, subd. 3
That last sentence is the one to remember if a rental company ever tells you, after the crash, that your waiver didn’t cover this particular kind of damage. The statute calls the waiver “a full and complete discharge”, and any exclusion in it has to be one the commerce commissioner approved.
The other products at the counter are regulated separately. Personal accident insurance, personal effects insurance, and rental liability insurance can only be sold if their forms and rates met the approval requirements of the insurance code, the company has to run a training program submitted to the commissioner, and for those products “[c]ompensation may not be determined in any part by the sale of insurance products.” § 72A.125, subd. 2. That compensation rule is written for those three insurance products. It doesn’t say the same thing about the waiver.
The bill that shows up after the crash
Rental companies don’t just bill for the dent. They bill for the days the car sat in the body shop instead of earning money. That’s “loss of use”, and Minnesota’s rule on it has an interesting history.
Paragraph (h) says it plainly today: “Compensation for the loss of use of a damaged rented motor vehicle is limited to a period no longer than 14 days.”
It didn’t always read that way. The 1988 version made the rental company prove, before it could collect for loss of use, “that had the vehicle been available, it would have been rented” and “that no other vehicle was available for rental in place of the damaged vehicle”, and it allowed compensation “only for the period when the damaged car actually would have been rented.” 1988 Minn. Laws ch. 611, § 2. That’s a hard showing for a company with a lot full of identical sedans.
In 1995 the Legislature struck all of it and wrote the 14-day cap in its place. 1995 Minn. Laws ch. 225, § 1. Same bill that gave rental companies a cap on their vicarious liability for their renters’ crashes. The Revisor now notes that cap as preempted by federal law, and I covered that whole story at /news/minnesota-vehicle-owner-liability/. The loss-of-use change is still on the books. The proof requirement came out. What went in was a ceiling.
Two more rules matter when the bill arrives. Paragraph (g) says that when the damage is covered by your policy under paragraph (a), “the rental contract must state that payment by the reparation obligor within the time limits of section 72A.201 is acceptable, and prior payment by the renter is not required.” The contract has to say your insurer’s payment, on the claims-handling clock, is good enough, and that you don’t have to pay first. I wrote about § 72A.201 and its deadlines, and whether you can sue an insurer under it, at /news/minnesota-auto-total-loss-claims/.
And then there are the charges the statute never mentions. Subdivision 5a doesn’t use the words “diminished value”, “administrative fee”, or “appraisal fee”. What your policy has to cover is “all of the obligation for damage and loss of use”. Whether a particular line item on a rental company’s demand letter is “damage”, and whether the renter was obligated to pay it at all, is a fight about the rental contract and the policy. The statute doesn’t hand the rental company a list of fees it gets to add.
Whose insurance pays first?
For damage to the rental car, the obligation is yours, and your policy covers it under paragraph (a). Where you have two policies with this coverage, you pick which one to collect from, and that plan gets “a pro rata contribution from the other plan or plans based upon the property damage limits of liability.” § 65B.49, subd. 5a(d).
For liability to other people, the answer flipped in 2007, and the rental industry won the round.
In August 1994, a man rented a car from Hertz, declined Hertz’s liability supplement, and got into a crash. His rental agreement said that if he didn’t buy the supplement, his own insurance would be primary and Hertz would step in only if he had none. The Minnesota Supreme Court threw that clause out in January 1998. “A self-insured car rental agency does not meet its obligations as an automobile owner under the No-Fault Act by thrusting upon the renter its responsibility to provide liability coverage — that is, by providing liability coverage only in the event that the renter is without liability coverage.” Hertz Corp. v. State Farm Mut. Ins. Co., 573 N.W.2d 686, 688–89 (Minn. 1998). Hertz’s coverage was primary; the renter’s State Farm policy was “secondary under the statute, in excess of the Hertz coverage.” Id. at 691. One justice dissented, calling the result “wrong, fundamentally unfair, and poor public policy.” Id. at 691 (Page, J., dissenting).
The Legislature came out where the dissent did, nine years later. Until 2007, paragraph (j) made the rental owner’s coverage excess only for a loaner from a repair shop. The 2007 act struck that limit, so paragraph (j) now reads, for every rental: “The plan of reparation security covering the owner of a rented motor vehicle is excess of any residual liability coverage insuring an operator of a rented motor vehicle.” 2007 Minn. Laws ch. 72, § 1. The same act added that the owner’s coverage “must apply whenever the operator is not covered by a plan of reparation security as provided under paragraph (a)”. § 65B.49, subd. 5a(i)(2). As I read the two together, your liability coverage now goes first and the rental company’s is the backstop. That’s what Hertz tried to do by contract in 1994 and couldn’t.
What if I’m renting for work?
Then your employer’s policy may be first in line. “If the person renting the motor vehicle is also covered by the person’s employer’s insurance policy or the employer’s automobile self-insurance plan, the reparation obligor under the employer’s policy or self-insurance plan has primary responsibility to pay claims arising from use of the rented vehicle.” § 65B.49, subd. 5a(d).
And business policies have their own hook. “All commercial automobile liability policies must provide coverage for rented vehicles as required in chapter 65B.” Minn. Stat. § 60A.08, subd. 12. In 2004 the Minnesota Supreme Court read “as required in chapter 65B” to mean subdivision 5a and nothing broader, and since 5a at the time said nothing about underinsured motorist coverage, an employer’s commercial policy didn’t have to provide it on an employee’s out-of-state rental. Turner v. Mut. Serv. Cas. Ins. Co., 675 N.W.2d 622, 625–26 (Minn. 2004). The court said subdivision 5a “was clearly meant to protect only the vehicle from damage”. Id. at 626.
The 2007 amendment changed the premise. Paragraph (a) now extends uninsured and underinsured motorist coverage to the rental. In 2019 the federal district court in Minnesota called it “a natural extension of Turner” to conclude that subdivision 5a now mandates underinsured motorist coverage for rental vehicles under a commercial policy, and held that a school district’s business auto policy had to extend it to an employee who died after a crash in a car the district rented. Berkley Nat’l Ins. Co. v. Franklin, 357 F. Supp. 3d 871, 875–76 (D. Minn. 2019). The insurer had argued that “natural person as named insured” kept a policy issued to an organization out of it. Id. at 874–75. The court didn’t buy it. That’s a federal trial court reading a Minnesota statute, so it binds no Minnesota court, but it’s the most direct answer I’ve found. I explained how underinsured motorist coverage works generally at /news/minnesota-uninsured-underinsured-motorist/.
When is the waiver worth buying?
Subdivision 5a only helps you if you have a Minnesota policy it applies to. The waiver earns its price when you don’t, or when you’re outside what subdivision 5a covers:
- You have no auto policy at all. No car, no policy, no subdivision 5a. If you damage the rental, the bill is yours unless something else covers it. The waiver, or whatever coverage comes with the card you pay with, is what stands between you and that bill. Card benefits vary from card to card; read your own card’s terms rather than assuming.
- Your policy isn’t the kind 5a describes. It reaches policies insuring “a natural person as named insured” and covering private passenger vehicles, pickups, and vans. A policy covering only a collector-plated car is out by name.
- The rental runs longer than a month, or has a buyout option. Paragraph (b) says it isn’t “rented”.
- The truck is too big. Over a registered gross vehicle weight of 26,000 pounds, paragraph (a) doesn’t reach it.
- The car is worth more than your coverage. Your policy covers the rental up to your property damage liability limit, with a $35,000 floor. Rent a car worth more than that and total it, and the difference is on you.
What the waiver doesn’t buy, for most Minnesotans with an ordinary policy, is protection they don’t already have by law. That’s not my line. It’s the Legislature’s, and it’s printed on the form.
A bill would have repealed the whole thing
This one surprised me. In March 2025, a bill to create a “Peer-to-Peer Car Sharing Program Act” was introduced in the Minnesota House as HF 2752. Its repealer section struck § 65B.49, subdivision 5a, in its entirety, effective January 1, 2026: the coverage mandate, the 14-day loss-of-use cap, the counter notice, all of it. I read the bill. The car-sharing sections it would have added don’t put back a rental-car coverage requirement for ordinary rentals.
It got a first reading and a referral to the House commerce committee on March 24, 2025, and nothing after that. Subdivision 5a still reads the way it has since 2007. But a consumer protection that’s been on the books since 1987 was written out of the law in a bill anyone skimming the list would have filed under car sharing.
The form’s still there. Read it before you sign the second line.
Madgett Law, LLC
Madgett Law, LLC represents Minnesota consumers in insurance disputes and in claims over unfair business practices, including fights with the companies that bill after the crash. More on that work is on our general litigation page. If a rental company is demanding money your policy should have paid, or your insurer is saying the rental isn’t its problem, send us a message.
Sources: Minn. Stat. § 65B.49, subd. 3(1) ($10,000 minimum property damage liability); subd. 5a(a) (rental vehicle coverage under the property damage liability portion; extension of basic economic loss benefits, residual liability, UM and UIM; collector-plate and recreational-vehicle exclusion; not contingent on fault; $35,000 floor), (b) (when a vehicle is rented; one-month and purchase-option exclusions), (d) (choice among plans; employer’s policy primary), (f) (mandated notice; written acknowledgment before sale of a collision damage waiver), (g) (payment by reparation obligor within § 72A.201 time limits acceptable; no prior payment by renter), (h) (loss of use limited to 14 days), (i)(2) (owner’s policy applies whenever operator not covered), (j) (owner’s plan excess of operator’s residual liability coverage), together with the Revisor’s note on paragraph (i)(2). Minn. Stat. § 65B.43, subd. 15 (plan of reparation security). Minn. Stat. § 168.10, subds. 1a–1d (collector’s vehicle plates). Minn. Stat. § 72A.125, subd. 2 (sale of rental vehicle personal accident, personal effects, and liability insurance; compensation), subd. 3 (collision damage waiver defined). Minn. Stat. § 60A.08, subd. 12 (commercial automobile liability policies; rented vehicles). Minn. Stat. § 645.02 (default effective date). 1987 Minn. Laws ch. 337, § 106 (enacting § 65B.49, subd. 5a, including the original notice; approved June 1, 1987). 1988 Minn. Laws ch. 611, § 2 (amending § 65B.49, subd. 5a; approved April 24, 1988). 1995 Minn. Laws ch. 225, § 1 (14-day loss-of-use limit; effective August 1, 1995). 2007 Minn. Laws ch. 72, § 1 (adding “wherever issued,” clause (a)(2), the liability notice sentence, and the current paragraph (j); signed May 14, 2007). H.F. 2752, 94th Minn. Leg. (2025) (as introduced; § 9 repealer; status: introduced and referred to Commerce Finance and Policy, March 24, 2025). Hertz Corp. v. State Farm Mut. Ins. Co., 573 N.W.2d 686, 688–89, 691 (Minn. 1998); id. at 691–92 (Page, J., dissenting). Turner v. Mut. Serv. Cas. Ins. Co., 675 N.W.2d 622, 625–26 (Minn. 2004). Berkley Nat’l Ins. Co. v. Franklin, 357 F. Supp. 3d 871, 874–76 (D. Minn. 2019). This article is general information about Minnesota law, not legal advice. Reading it does not create an attorney–client relationship, and no outcome is promised or implied.