Rental Car Accidents and Rental Car Damage: Insurance Coverage Issues

In many ways, the legal issues involved in an accident involving a rented car should be treated no differently than any other auto accident.

When you rent a car, whether for a business trip or for personal reasons, it usually means you will be driving an unfamiliar vehicle in an unfamiliar location. Under these circumstances, even the safest drivers may find themselves involved in a car accident.

In many ways, the legal issues involved in an accident involving a rented car should be treated no differently than any other auto accident. It will likely be necessary to file a police report and to report the accident to your personal insurer. But the fact that the vehicle has been rented will add some additional complications that must be dealt with, particularly when it comes to insurance.

This article looks at some common legal issues that crop up after a car accident involving a rental car.

Reporting the Accident

Typically, a car accident will be reported to the police (if there are injuries) and the personal insurance companies of the drivers involved. (More on Contacting Your Insurance Company After a Car Accident.) If you are driving a rented vehicle, however, it doesn’t end there, as there will almost certainly be additional reporting requirements involving the rental company.

The information on how to report an accident may be provided by the rental company when you rent the car, or it may be in your copies of documentation involving the rental. If you are uncertain about the proper procedure required by the rental company for making an accident report, ask the rental company representative to explain it to you. It is important to follow the terms of your agreement with the rental company after you’ve been involved in an accident in one of their cars, as any failure to do so could result in additional liability on your part.

Rental Car Accidents and Personal Auto Insurance

You may think that your personal auto insurance will cover you in the event of a rental car accident, and that may very well be true. Before you rent a car it is important to familiarize yourself with your own auto insurance policy in order to determine if it is adequate or if additional insurance coverage needs to be purchased before you rent. Some rental car companies may pressure you to purchase additional insurance before you rent. This is frequently the case if your personal insurance policy has a high deductible. But the choice is yours, and the car rental company can't require you to purchase additional coverage as long as you've got required coverage. (Learn more about Car Accidents and Insurance Coverage.)

Even if you’re traveling in a foreign country, where laws related to liability and auto accidents can differ dramatically from home, you may still be covered by your personal auto insurance policy. Before you plan you trip, it’s a good idea to read your policy thoroughly so that you will be prepared when renting a car abroad.

Collision Coverage Through the Rental Company

Your own insurance policy probably provides coverage for a rental car accident, but be sure to review the terms of your coverage just in case. Most rental car companies will offer collision coverage, which extends to damage to the car you are driving, irrespective of whether or not the accident was your fault. But be careful here, because there is likely a lot of fine print, and it may contain loopholes. In addition, there's a good chance that any coverage offered by the rental company will merely overlap with coverage you already have, so you may be wasting your money by purchasing additional insurance from the rental company.

Your Credit Card Company May Provide Insurance

Another place to check regarding insurance coverage for your car rental is with your credit card provider. Oftentimes a credit card will provide at least a minimum amount of protection (i.e. covering collision damage to the rental car after a deductible) when you use the card to reserve and/or pay for the rental. Check your credit card agreement or call the credit card company to see if this is an option for you.

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