What Happens if You Have an Accident With a Rental Car?

Many Americans rely on rental vehicles while waiting on repairs to their own personal vehicles or while traveling out of state. Most rental agencies offer limited coverage in the event of an accident, and a rental car driver’s personal auto insurance policy could also come into play after an accident while driving a rental car. If you or a loved one has an accident with a rental car, you should have some idea of what to expect in terms of recovering your losses.

Damaged rental car

Rental Insurance

Most of the major car rental companies in the U.S. offer some type of limited insurance coverage with every rental, and some offer additional coverage for an extra fee. The terms of these policies are generally very strict and very specific in regard to what the rental company’s insurance carrier will and will not cover after an accident.

A rental car contract will typically stipulate that the renter must return the vehicle in the same condition he or she received it. If an accident happens, this means the renter is liable for the damages even if he or she did not cause the accident. However, most rental agencies offer additional insurance coverage that may be invaluable for a renter who experiences an accident due to another driver’s negligence.

Types of Rental Car Insurance Coverage

  • A collision damage waiver would effectively release the renter from liability for damage to the rental car. This type of coverage would also apply in the event someone steals the rental car from the renter. Most collision damage waivers will not apply if the damage resulted from the renter’s reckless driving or if someone other than the renter drove the vehicle and got into an accident.
  • Liability coverage from a rental agency often overlaps with a renter’s personal auto insurance coverage. This type of coverage would pay for medical expenses and property damage to another driver after an accident the renter causes.
  • Personal accident insurance would cover any damages to the renter and his or her passengers after an accident. This type of coverage could overlap with your own personal injury protection coverage in your personal auto insurance policy.
  • Personal effects coverage would pay for stolen or damaged personal property kept in the rental vehicle.

Purchasing any of these types of additional coverage when you rent a vehicle can be incredibly helpful if you have an accident. If the rental insurance covers your losses, you may not need to use your own auto insurance, or you could have the option to file a lawsuit against the at-fault driver for your losses that insurance cannot cover. If you were injured or suffered losses in a rental car accident due to another’s negligence, Horwitz, Horwitz & Associates can help. Our car accident lawyers in Chicago have extensive experience and can help you recover compensation.

Personal Auto Insurance

Beyond rental insurance, every driver in the U.S. must purchase and maintain auto insurance for a vehicle in accordance with the driver’s home state laws for car insurance. Some states follow fault-based rules for handling car accidents and require drivers to carry certain minimum amounts of liability coverage. In no-fault states, drivers must carry personal injury protection and file claims against their own personal auto insurance policies for coverage regardless of who was at fault for an accident.

Many drivers may wonder if their personal auto insurance policies will apply out of state, and they do. However, the terms of a personal auto insurance policy will typically adjust to meet the state’s minimum requirements if the state in which an accident occurred has different insurance minimums. For example, if you have an accident in a state that requires $5,000 more in minimum insurance coverage than your home state, your insurance company would likely make up the difference.

The final type of coverage available after a rental car accident is through your credit card company. When you use a credit card to rent a car, the terms of your credit card may cover any losses you incur during the course of your rental. However, this type of coverage almost never applies to liability, so if the renter causes an accident, his or her credit card company will likely not offer any coverage.