Getting into any kind of car accident can be stressful enough, even if damages are minor and there are no injuries. But if you’re in an accident while driving a rental car, you’re probably even more worried about the consequences and costs for repair.
As a renter, you’re responsible for returning a car to the rental company in the same condition it was in when you received it.
However, there are usually 3 sources of insurance that would cover damage to a rental car:
- The rental car company
- Your personal car insurance
- Your credit card that was used to pay for the rental
What insurance covers for a rental car
The rental car company offers supplemental insurance that’s optional, or add-ons.
Usually, the optional insurance includes:
- Collision damage (also called a “loss-damage waiver”). This covers financial responsibility if the rental car is damaged, stolen, out of use while being repaired, towing, and other fees.
- Liability. This would cover you if there’s any lawsuit related to your use of the rental car. In other words, if there’s an accident and you were at fault, liability coverage should take effect in any claim against you by another driver. Usually, the limit is $1 million.
- Personal accident insurance. This is like Personal Injury Protection (PIP), which covers medical costs.
- Personal effects coverage. Anything you transport in the car (luggage, electronics, personal items, etc.) is covered under this add-on policy.
Adding optional coverage is an expense. Each of these coverage policies likely has a per-day cost, and although it might seem like just a few dollars a day, if you’re renting a car during a vacation or for a business trip for several days, it adds up fast.
Do you really need the optional insurance coverage?
Your auto, renters or homeowners, and health insurance likely covers a good portion of what an accident would cost, even in a rental car. However, it’s good to check your individual policies before you rent a car so you can see what you might want in supplemental coverage.
In every state except New Hampshire, you’re required to purchase a certain amount of liability coverage as part of your automotive policy.
Here’s how your “regular” insurance might cover you without requiring rental company insurance:
| Collision & liability | Your state-mandated liability coverage might cover collision and liability related to a rental car. If you have comprehensive collision coverage (i.e. you have insurance in addition to the minimum amount), it should cover damage expenses related to the rental car. |
| Personal accident insurance | If your health plan includes accident-related injuries, and if you have PIP or MedPay coverage on your car insurance policy, it would protect you in a rental car just as it would in a car you own. |
| Personal effects coverage | If your homeowners or renters insurance includes off-premises coverage, your belongings are insured at home, in your car, or in a rental car. |
Again, insurance policies vary and you want to make sure yours cover accidents or damage related to rental cars.
If you are a licensed driver but don’t have automotive insurance (for example, if you don’t own a car) and you don’t have homeowners or renters insurance, you should purchase the optional insurance from the rental car company.
What protection do I get from my credit card for a rental car accident?
Many major credit cards offer protection that goes into effect after your personal automotive insurance policy has paid. It might even reimburse you for your deductible, up to $1,000.
Some credit cards will pay out your damages for a rental car before getting your personal insurance company involved. However, it’s not a substitute for all of the insurance offered by the rental car company; it usually only covers the collision or loss damage, towing expenses or administrative fees, and loss of use. It won’t cover medical expenses or other liability.
Different credit cards offer varying benefits, so it’s important to call your credit card company ahead of time to learn what yours would cover.
When you need the optional rental car insurance
We’ve talked about when you might not need to opt in to additional insurance when you rent a car.
But when is it a good idea?
Here are a few examples:
- If you don’t have comprehensive and collision insurance on your current policy.
- If you’re only insured for a commercial (business) policy and not a personal policy.
- If you don’t want the possibility of a high deductible.
- If you’re driving a rental car outside the U.S.
Coverage from your personal policy applies if you’re renting a car for personal reasons — not for business. If you need to rent a car for a business trip, check with your employer about the coverage it carries.
Check your personal coverage and decide if it’s enough based on how much risk you’re willing to take. No one plans to be involved in an accident. That’s why we have insurance — to protect us from the unexpected. If your personal policies are robust enough to cover a rental car accident, including medical expenses and liability for another person’s damages, you probably don’t need to spend the extra money for add-on rental car insurance.
But if the deductible is higher than you can manage comfortably, if you aren’t sure about your personal policy limits, or if you just want to be on the safe side, the amount you’d pay for additional rental insurance might be worth your peace of mind.
What to do after an accident in a rental car
Now that you know whether or not you will purchase rental car insurance, it’s time to talk about the nuts and bolts of what you should do if you’re in an accident.
Really, it’s similar to how you’d handle any other car accident, but with a few additional steps.
1. Check on everyone’s physical condition.
If you’re able to do so safely — and if you’re in a condition to move around — assess the situation. If anyone is hurt, call 911 (or the local authorities if you’re traveling in another country). You should check on the condition of your own passengers as well as any other drivers or passengers in other vehicles.
If the car crash is blocking traffic, try to relocate the cars and people to the road shoulder or a safe place so you’re out of danger from oncoming vehicles.
Even if there are no injuries, call 911 or the local police dispatch to have an officer examine evidence at the scene and file a police report.
2. Gather evidence and contact information.
Just as you would after any collision, you can gather evidence that shows how the accident happened and who was at fault. Evidence can include accident photos, witness statements, physical evidence, and other relevant details.
Exchange contact and insurance information with the other drivers and involved people. Ask the police officer on the scene for their name, badge number, contact information, and the accident case number so that you can secure a copy of the accident report.
3. Call the rental company.
Your rental company should have provided you with an emergency number to call if you have problems with the vehicle. Use it. Ask the company what you should do with the car after an accident. They might want it towed to a specific location, tell you to bring it to one of their rental offices if it’s driveable, or something different. It’s their car, so they should decide what happens next.
You’re responsible for the rental car until it’s returned.
Once the company tells you what to do and where to go, handle it as you would your own car. Before work is done to make repairs, contact the rental company for approval.
4. Call your insurance company (and the credit card company).
Begin the claims process with your own insurance company. If the accident isn’t your fault, a claim won’t affect your premium rate. It’s better for you to have filed a claim than for the insurance company to learn about the crash because someone else filed a claim against you.
Often, claims are denied because a policyholder didn’t file soon enough after an accident. Call as soon as possible so they have the accident on record.
If you used a credit card to pay for the rental car, call your credit card company, too. Make a report of the accident to the company for the credit card you used to pay for the rental car.
5. File a report with the rental company.
This is a different process from simply determining what to do to get the car repaired after an accident. You must file a report with the rental company. This report will ask you about fault for the accident, type damage to the car, injuries, and other information.
Does it matter who’s at fault in a rental car accident?
It does, but it matters more that you’re properly insured.
If you’re at fault, you can be covered by your own insurance or the supplemental rental car insurance, as discussed above.
If the other driver is at fault, be aware of one thing:
The rental car company might not want to wait for the insurance claim process to pay for repairs to the vehicle. It might charge your credit card for the full amount of the damages, and you’ll need to file a claim against the other driver’s insurance to be reimbursed.
Your rental agreement is a contract. Your signature probably indicates that you agree to obey the law and that if you don’t, the rental company isn’t bound by the contract. If you speed, commit DUI, or do anything else that’s against the law while using a rental car, you can’t assume that its insurance (or any insurance) will cover you.
Call a lawyer after a rental car accident
If you’ve been in an accident involving a rental car, it might be less straightforward than an accident in your own car — more companies, more contracts, different insurance.
You might wish to call a personal injury attorney for guidance to make sure you’re getting what you need from your insurance coverage. Feel free to use the Enjuris Personal Injury Law Firm Directory to find a lawyer near you who can help keep your costs down and recover compensation if necessary.