Rental cars give you mobility and freedom when you travel. But what happens if you get hurt in an accident while driving a rental car? Or what if a rental car driven by someone else hits you? Who is responsible for paying your damages?
The answer will depend on your crash. The most reliable way to secure compensation for your losses is to hire an experienced car accident attorney to handle your claim.
Car Accident Liability Basics
As a general rule, liability for the injuries, financial losses, and property damage caused by a car accident falls on the party at-fault for the crash. So, for example, the at-fault driver in an accident has a legal obligation to pay for accident victims’ losses.
If an insurance policy covers the driver for that liability (which is required in all but two states — New Hampshire and Virginia), the insurance company steps up first to pay the victims’ damages up to the limits of the policy. Any remaining losses not paid by the insurer are the driver’s responsibility.
The parties who might face liability for a car accident can include:
- The driver who caused the crash
- The employer of a driver who crashed a work vehicle
- The manufacturer of a defective car that crashed
- A government agency or contractor responsible for dangerous road conditions
- A bar, restaurant, or social host who served alcohol to an underage or obviously intoxicated driver who caused a drunk driving crash
In some states, such as Florida, drivers must also carry personal injury protection (PIP) insurance, also known as no-fault coverage. PIP covers the driver’s own medical costs, lost earnings, and other expenses resulting from any traffic accident, regardless of who was at-fault, up to a certain dollar limit. It also covers the driver’s passengers in a crash, and damages suffered by covered persons when they get hurt as pedestrians or cyclists in a traffic accident.
A person covered by PIP generally must turn first to that coverage for payment of their losses after an accident, before they can pursue others for additional compensation (if any). State laws sometimes limit when people covered by PIP can sue for additional damages. In Florida, for instance, you may only sue an at-fault driver for accident damages not covered by your PIP if you suffered a severe injury like loss of a bodily function, significant scarring or disfigurement, or death.
Liability in Accidents Involving Rental Cars
By-and-large, the rules above don’t change just because one of the vehicles involved in the crash was a rental car. Like any other crash victim, people who get hurt in a rental car accident can seek to hold an at-fault or liable party financially accountable for their losses, after reaching the limits of their PIP coverage (if applicable). The same potentially liable parties listed above could have an obligation to pay damages after a rental car accident.
Rental Car Companies Usually Not Liable for Renter’s Conduct
In some states, the law says that the owner of a car is automatically liable for the damages in an accident involving the car, even if someone other than the owner was driving it. Until 2005, car rental companies in those states sometimes faced liability to victims of accidents caused by their renters.
But that year, Congress passed the Graves Amendment, which overrode (preempted) those state laws as applied to car rental agencies. Under the Graves Amendment, rental car companies cannot be held automatically liable to their renters’ crash victims, regardless of what state law might say on the subject.
But that doesn’t mean you cannot sue a car rental company for accident damages — just that the rental car isn’t automatically on the hook. The Graves Amendment still leaves open the possibility of suing a rental agency for engaging in negligence or criminal wrongdoing that led to a crash. For example, if a rental car company rents a car they know is unsafe to drive because of a mechanical issue, they might still face liability to victims if the car crashes.
Rental Car Accidents and Insurance
The topic of insurance and rental cars is a constant source of confusion. Fault for that confusion tends to lie with rental car companies, whose salespeople frequently engage in high-pressure tactics and fear-mongering at the rental counter to get you to buy expensive accident coverage from them. Here’s what you need to know.
Insurance Doesn’t Change an At-Fault Party’s Liability for a Rental Car Accident
Perhaps most importantly, it’s critical to understand that insurance doesn’t affect any of the rules we’ve covered above concerning an at-fault party’s liability for an accident. The laws of car accident liability are what they are. Insurance doesn’t change them. It merely serves to allocate the financial risks they create.
In other words, the an at-fault driver carries liability insurance doesn’t magically make the driver not liable for the crash. It just means that an insurance company will step up first to pay damages on that driver’s behalf, up to the amount of the insurance policy’s dollar limit. The liability still rests with the driver, and if insurance doesn’t cover all of a victim’s damages, the driver remains on the hook for the remainder.
The Rental Company Already Carries the Required Minimum Insurance on the Rental Car
Most states (California being a notable exception) require rental car companies, like any other vehicle owner, to maintain minimum liability insurance and (where applicable) PIP coverage on their rental fleet. Anyone who rents a car in these states is usually covered under that minimum insurance as part of their basic rental contract. They don’t need to purchase it separately.
So, if you rent a car in a state that requires PIP coverage, like Florida, that coverage will generally be there for you to turn to if you get hurt in a crash while driving the rental. Likewise, if someone driving a rental hits you, the liability insurance on that vehicle will usually be there to cover your damages, just as it would be if the at-fault driver hit you with their personal vehicle.
Your Auto Insurance Might Step In Front of the Minimum Insurance the Rental Company Carries
Many, if not most, people who rent cars already carry their own auto insurance, because they have personal vehicles back home. And that insurance typically covers them for liability and (when applicable) PIP when driving a rental car.
This means that when they rent a car, two insurance policies may cover them against their crash-related liability and (when applicable) medical and other expenses — the insurance the rental car company carries on the car, and the insurance they carry on their own personal vehicle back home.
Knowing this, rental car companies commonly put a provision in their rental contracts that says that the renter’s own insurance will step up first (or in the language of insurance, it will be “primary”) to pay liability or PIP damages in the event of an accident. The rental agency’s insurance will then stand second in line (or be “secondary”) to cover any of those damages if they exceed the limits of the renter’s personal insurance.
To be clear, the determination of which insurance is primary and which is secondary doesn’t change whether you have coverage. It just affects which insurance policy you might turn to first to pay for damages you suffered in a rental car crash.
The At-Fault Party Must Pay for Damage to Your Rental Car, Even if You (or Your Insurers) Must Pay For It First
If someone damages your personal vehicle in a crash, it’s generally their responsibility to pay for repairs or a replacement vehicle, either through their liability insurance or out of their own pocket. But practically speaking, you might turn to your own auto insurance first to pay those costs, assuming you carry collision coverage, and then leave it to your insurer to pursue the at-fault party’s insurance company for reimbursement (a process known as subrogation).
But when you rent a car, the rental car company — not you — is the one harmed by the vehicle damage. And they want to get their repair money quickly and without extra expense. So they write into their rental contract that you have the obligation to pay for the vehicle damage immediately, even if it wasn’t your fault. You, in effect, become the insurer of the rental vehicle.
On its face, that might not seem fair. You didn’t cause the damage to your rental car, so why would you have an obligation to pay for it? The answer: because that’s how the rental agency wants things to work. They own the car, so they get to set the terms on which they’ll rent it to you.
And this is where the high pressure sales tactics at the rental counter come in. Knowing that you fear having to foot the bill for a totaled rental car, the rental agency offers to waive the vehicle damage provision of their rental contract for a fee. This is known as a collision damage waiver, or CDW. If you buy it, the rental company agrees to deal with the bulk of any damage to the rental car itself, rather than looking to you to pay for it.
But is that peace of mind worth the expense of the CDW? For many drivers, it’s not, because they’re covered for rental car damage under their own auto insurance or by virtue of using a credit card to rent the vehicle. And if the accident wasn’t their fault, they (or their insurers or credit card issuer, through subrogation) can also turn to the at-fault driver and that driver’s liability insurance to pay for those damages.
So, to summarize, if your rental car gets damaged in a crash, and you didn’t purchase the CDW, you might have to ask your own auto insurer or credit card company to pay the rental car company for the damage first, before going through the process of seeking reimbursement for those costs from the at-fault party. But in most cases, it’s unlikely you’d end up eating the cost of those damages yourself.
Tips for After a Rental Car Accident
If you get hurt in a crash involving a rental car—as a rental car driver or passenger, occupant of a vehicle struck by a rental car, bicyclist, or pedestrian—the steps you take afterwards can affect your rights. Consider following these tips to protect your interests and put yourself in a strong position to secure meaningful compensation.
Prioritize Medical Treatment
Your health and safety take priority. Seek medical attention immediately after a rental car accident, no matter how minor you think your injuries are. Some serious injuries may not show immediate symptoms. Then follow your doctor’s instructions when it comes to treatment. Seeking and following-up on care are important elements of establishing a claim for damages.
Deal Cautiously With Insurance Companies
Any insurance company that may have an obligation to pay for your rental car accident damages will look for reasons to avoid financial responsibility. So be cautious about engaging with them.
You may need to notify your insurance company about the accident and your injuries. If so, stick to the facts and do not get drawn into a discussion of who was at fault. You generally do not have to talk to someone else’s insurer about what happened. But if you choose to do so, the same rules apply, and don’t say anything that could be interpreted as you accepting fault for the crash.
If someone’s insurance company offers to settle your potential accident injury claim, call a car accident lawyer immediately. Do not agree to anything and don’t sign anything the insurer sends you. Any offer made to you directly will undoubtedly fall short of the amount you have the right to claim. Leave negotiations to a skilled legal professional who can protect your rights.
Contact a Car Accident Attorney Today
If you or someone you love got hurt in a car accident involving a rental car, you may have the right to claim significant financial compensation. To learn more, contact a knowledgeable car accident attorney today for your free case consultation.