Rental Car Accidents: Whose Insurance Pays?

Two different situations

Rental car crashes come in two kinds, and the insurance works differently in each. Either someone driving a rental car hit you, or you were driving a rental when you crashed.

If someone driving a rental hit you

It seems natural that the rental company should pay. It owns the car. But under a federal law, the Graves Amendment, a company in the business of renting or leasing vehicles generally cannot be held liable just because it owns the car (49 U.S.C. § 30106). It can still be liable for its own negligence, for example renting out a car with bad brakes it knew about.

So in most cases, the claim is against the driver, and the question is what insurance covers the driver:

• The renter’s own auto policy. In California, a renter’s personal auto insurance is generally primary, and the rental company’s coverage, if any, is excess over it (Insurance Code § 11580.9). Many renters carry their own policy, and it usually follows them into a rental.
• Coverage the renter bought at the counter. Supplemental liability insurance sold with the rental can add to what is available.
• The rental company’s own coverage, which may apply when the renter has no insurance of their own, usually at lower limits.

Many rental drivers are visitors from another state or country. Their insurer may be one you have never heard of. And if their coverage is too small, your own uninsured and underinsured motorist coverage may be what makes up the difference.

If you crashed in a car you rented

If you were driving a rental and someone else caused the crash, your claim is against the other driver and their insurance, the same as it would be in your own car.

If you were hurt, your own policy’s medical payments coverage may help with bills, and your uninsured motorist coverage may apply if the other driver had none.

As for the damage to the rental car itself:

• Your own collision coverage may extend to a rental. Check your policy.
• Your credit card may provide coverage for damage to a rental if you paid with it, usually only for the car, not for injuries or liability.
• The damage waiver sold at the counter, if you bought it, may cover the car.

If the other driver caused the crash, their insurer should ultimately pay for the rental car’s damage too.

What to do at the scene

• Get everything from the other driver: name, license, insurance and plate. If they are in a rental, photograph the rental agreement if they will show it, and note the rental company
• Call the police, and get the report number
• Photograph both cars and the scene
• Report the crash to the rental company if you were driving a rental, and to your own insurer
• Do not sign anything from a rental company or an insurer without reading it

Read what to do after a car accident for the full checklist.

Talk to Boyd

Rental car claims often involve several insurers pointing at each other. If you were hurt, call. The consultation is free, and Boyd takes the call himself: (714) 656-2400.