The rental car industry is a $40.65 billion industry across the globe, and it is only growing over time. While most rental car transactions go off without a hitch, unfortunately sometimes accidents occur in rented vehicles.
After a rental car accident, it’s important to understand what your rights are and who can be held responsible for covering crash-related losses. This guide explains when and how you can get rental car accident costs paid for so you aren’t left facing financial devastation.
What Kinds of Insurance Cover Rental Car Accidents?
Determining what insurance applies is one of the most complex issues to deal with after a rental car accident. There are multiple different kinds of policies that potentially provide coverage including the following.
The Rental Car Driver’s Auto Insurance
In general, personal auto insurance covers accidents that occur in rental cars.
Usually, the exact same deductibles and coverages apply to a rental car as to a personal car. In other words, if a motorist has comprehensive coverage, collision coverage and liability coverage with a $25,000 per person and per accident limit when driving their personal car, the motorist also has this same coverage when driving a rental car.
There may be some limitations on this, though, such as if the policyholder is renting a car in a foreign country where personal auto insurance might not apply.
Credit Card Car Rental Insurance
Sometimes credit card companies offer car rental insurance. Usually, this coverage is limited to paying for theft or damages to the rental car. Credit cards don’t typically provide liability coverage, so wouldn’t pay for damages if a rental car accident caused injury to other victims.
There may be some fine print to be aware of with the rental car insurance that credit cards provide. For example, luxury cars may be excluded and the coverage may be secondary, which would mean it would only pay for covered losses not paid for by the driver’s primary auto insurance.
Insurance Purchased Through the Car Rental Company
Car rental companies usually offer various types of insurance policies as well. This can include:
- Damage waivers. This will pay for any damage to the rented vehicle that occurs in the event of a covered incident.
- Supplemental liability insurance. This provides additional liability coverage for a rental car driver who harms other people or property.
- Personal accident insurance. This pays for medical expenses you and passengers in your car incur due to an accident.
- Personal effects insurance. This covers items in the car that are stolen.
Can the Car Rental Company Be Held Liable for Damages?
In the past, victims of rental car accidents sometimes made claims against rental car companies when crashes occurred in rented vehicles. Crash victims used a legal doctrine called vicarious liability to hold rental car companies responsible for collisions. In some cases, they received millions of dollars in compensation from the company.
This was prohibited by the Graves Amendment, which was passed as part of a federal highway bill in 2005. Under the Graves Amendment, car rental companies cannot be held vicariously liable for injuries their customers cause unless the rental car company somehow contributed to those injuries.
For example, a rental car company could be held responsible if they acted negligently or criminally in renting a car to the person who caused an accident and the company’s negligence or wrongdoing was a direct contributing factor to the crash occurring.
How Can You Get Compensation for Losses if You Are Involved in a Car Rental Accident?
If you are involved in a car rental accident, your ability to obtain compensation for losses depends on factors including who was at fault for the accident and the nature of the losses.
If You Were at Fault for the Accident
If you cause a crash, you are responsible for covering losses other people experience. Your personal auto insurance, along with any applicable insurance provided by your credit card or purchased through the car rental company, covers your losses.
If you experience injury, your medical bills and lost wages are covered by Personal Injury Protection (PIP) if you live in a no-fault state and have this type of coverage. Any collision coverage or damage waivers you paid for pays for damage to the vehicle. And any liability coverage you have pays for losses you caused to others.
If you sustain losses that you have no insurance for, you are left with out-of-pocket costs.
If You Are in a Rental Car and Another Driver Is at Fault
If you are in a rental car and another driver causes your accident, you are able to pursue a claim against that driver. Their liability insurance coverage pays for your injuries and lost wages up to policy limits. You can settle out of court if you are offered a fair amount of compensation or file a lawsuit.
If you want to make a claim against the other driver, you need to show the other motorist’s negligence was the direct cause of the accident and that you were harmed financially and should be entitled to compensation.
If a Driver of a Rental Car Hits You
If you are walking, biking, or in another vehicle and the driver of a rental car hits you, you pursue a claim against that driver. Again, their liability insurance covers costs up to policy limits and you can negotiate a settlement or sue. If you sue, you need to prove the other driver’s negligence was the direct cause of the crash and of the harm you endured.
You can potentially recover compensation from the at-fault driver’s liability insurance, as well as from any supplementary liability insurance the driver purchased from the rental car company.
Getting Help After a Rental Car Accident
Rental car accidents are very complicated due to the fact there could be multiple insurers involved. You need to make sure you have the right legal advice to maximize the chances you get the compensation you deserve. Contact a rental car accident lawyer ASAP after a crash so you can get help at every step of the way.
Frequently Asked Questions (FAQs)
What happens if you cause damage to a rental car?
If you damage a rental car, your auto insurance may provide coverage for resulting losses. Your costs may also be covered through a supplemental damage waiver if you purchased one from the rental car company. It is also possible your credit card may offer damage coverage if you paid with a card that offers this feature when you rented the vehicle.
What to do after an accident in a rental car?
If you get into an accident in a rented vehicle, you should call the rental car company and report the collision.
You need to contact the police if required to do so based on state law and the nature of the accident. For example, usually a phone call to the police is required if anyone was hurt or killed or if a reasonable amount of property damage occurred.
You should seek medical attention if you may have been hurt and exchange contact details with other drivers involved in the crash as well as witnesses to the crash.
Does car insurance cover rental cars?
In most cases, your standard auto insurance coverage applies if you are driving a rental car when you are involved in a crash. This includes your liability insurance as well as comprehensive and collision coverage. However, there are exceptions so check with your auto insurer before renting a car to find out what protections are in place and whether you need to buy supplemental coverage.
