You are about to be on the road trip of a lifetime and can't wait to experience America on the open road. You have an amazing rental car, and you have placed all your favorite road trip songs on your playlist.
Little do you know, soon you'll be in a car accident with a pickup truck. All you'll be thinking is, “Did I decline a car insurance policy at the rental counter?" When you decline such coverage, you are taking on what is referred to as a collision damage waiver.
The most important question on your mind is who pays for a rental car after an accident. This depends on who is the at-fault driver and the level of rental car coverage from the driver's car insurance company.
The answers to these questions determine who pays for the cost of your rental car damage and any other expenses you may incur as a result of the accident. Examples of other expenses could be medical ones related to any injuries you might sustain as a result of the crash.
First Steps After the Accident
Having a car accident in a rental car isn't that much different than if it were your own car. Your first step after an accident is to:
- Make sure everyone is safe at the scene
- Call 911 if necessary for the accident victims
- Exchange phone numbers and driver contact information like addresses
- Swap auto insurance policy information with the other driver
- Call your rental car company right away after an accident
- Ask your rental car company if you need to file a police report, even for minor damages to your rental vehicle
Who Is at Fault for the Accident?
In deciding who pays for the rental car after an accident, the most important inquiry is who caused the accident. If the other driver did, their auto insurance company is on the hook for the cost of a rental car repair or a total loss.
Under the Graves Amendment, car rental companies are not automatically liable for car accident damages because they're the owners of the vehicle—unless the rental company's negligence, such as failure to maintain brakes, contributed to the accident. In states like New York, this limits rental companies' vicarious liability, allowing them to offer temporary rental insurance.
The best-case scenario is that the other driver is at fault for the accident, and they have insurance coverage. If so, an insurance adjuster from the at-fault driver's insurance company will investigate the claim and make an offer under the terms of that driver's policy. Almost every state requires drivers to carry a minimum type of liability coverage that will offset property damage to the other vehicle, which in this case would be your rental car.
If the other driver was operating without insurance, that becomes a more difficult situation. You may have to pay out-of-pocket if your own insurance doesn't cover it. Examples of out-of-pocket expenses are those related to the medical care you or the other passengers may need, rental car fees, and costs the rental car company may incur when they fix the vehicle at a repair shop.
After you have handled the out-of-pocket expenses, you could then attempt to sue the other driver for compensation or reimbursement. However, if the other driver didn't have insurance in the first place, collecting from them might not be possible. If they don't have any assets, there may be nothing to recover.
If you are at fault, you are responsible for the damages to the rental car and the other driver's vehicle. That's where your car insurance coverage will (hopefully) kick in. Assuming you have the proper coverage, your insurance will pay.
Uninsured Motorist Coverage
If the other party is at fault but uninsured, you will need to make a claim with your own insurance company under your uninsured motorist benefits for rental reimbursement coverage.
The good news is that the percentage of uninsured motorists declined nationally from 13.4 percent in 2009 to 11.9 percent in 2010 and averaged 12 percent in recent years, according to the Insurance Research Council.
What About Rental Car Insurance?
Rental car agents ask drivers which variety of coverage they would like. While many people decline coverage, it may be worth revisiting if you aren't sure what your current policy covers. Or it may be worth revisiting if your car insurance has significant exclusions, such as long-term rentals or business use if rented under your company's name.
Rental car companies offer different insurance types:
- Collision coverage
- Liability insurance
- Personal accident insurance
While this coverage may initially cost you out-of-pocket, it will likely help you in case your own insurance won't cover damage or if the other driver is uninsured. Review the policy you sign, including any disclaimers attached, to ensure what you are opting for satisfies your needs.
Your credit card company may provide some layer of rental car insurance protection, but each policy is different. You will need to check with your individual carrier to learn more. If you aren't sure what type of insurance coverage you have either through your own policy, a credit card company, or from the rental company itself, seek out the legal advice of an experienced car accident attorney.
Who Pays for a Rental Car After an Accident? Ask an Attorney
Being in an auto accident while in a rental car can create several unique problems regarding who should pay for what damages. While the law can be confusing, it doesn't have to be. If you have had an accident, your best first step is to speak with a personal injury lawyer in your area today. They can help you learn who bears what responsibility for costs and damages.
Car accident lawyers will help determine who bears responsibility and assist with the insurance claims process. It can be difficult to know what you are entitled to under your policy limits. An attorney can answer the following frequently asked questions (FAQs) during a case evaluation:
- Will you have to pay a deductible?
- Will your premium increase after the accident?
- Will your personal injury case be likely to succeed?
If you're still confused, you might consider reviewing the following resources as well: