Rental cars have a higher rate of collision compared to their non-rented counterparts, according to a recent report by the Journal of Advanced Transportation. Whether they are on an extended vacation or a brief business trip, many Americans choose the convenience of car rental as their means of transportation. Unfortunately, what is supposed to be a convenience can become a complete disaster when involved in a rental car accident. A couple of questions naturally come to mind, such as who is responsible for paying the damages and who will be held liable. The answer to both questions is: it depends on the particulars of the accident.
Generally, everything comes down to fault and the type of insurance coverage that you have. After being in a car accident involving a rental car, you should remember that you are responsible for whatever damages or losses occurred as the renter of that vehicle. Upon renting a car, you are contractually obliged to return it in a condition equivalent to when it was initially leased to you, regardless of who caused the accident. If you are involved in an accident or damage the vehicle within the leasing period, there are three primary sources of possible insurance coverage that will pay for the repair:
- the rental company,
- your auto insurance carrier, or
- the credit card that you used to rent the vehicle
When renting a car, the company's representative will offer additional insurance coverage. Some of the most frequently provided supplemental insurance coverage options proposed by car rental companies are...
Collision Damage Waiver
This waiver is also recognized as a 'damage waiver' or 'loss damage waiver,' together with a collision damage waiver. The rental company will renounce any vehicle replacement or repair expenses if the vehicle gets damaged or stolen within the rental period. If the damage sustained was due to reckless driving or while an unauthorized driver was operating it, exceptions can apply.
Keep in mind that a collision damage waiver isn't technically insurance and is always optional, often coming with an additional cost. However, if comprehensive and collision coverage is available in your car insurance policy, they will likely pay for the damages or loss to the rental car. Contact your insurance company to find out if this coverage is available to you.
Liability coverage will pay for any property damage and medical expenses incurred from a rental vehicle accident as stated in Section 14-154a of Connecticut's General Statutes. The liability coverage provided by the car rental business will frequently overlap with your personal auto insurance (assuming you own and insure a vehicle).
However, keep in mind that having only the state of Connecticut's minimum liability insurance coverage of 25/50 may not be sufficient to adequately protect you in the event of a car accident. Furthermore, your car insurance policy may not provide this essential coverage in some instances. Always contact your insurance carrier for specific answers regarding your policy.
Personal Accident Insurance
This insurance covers any injuries sustained by the rental car driver or any of the driver's passengers as a result of an accident involving the rental automobile. It might also cover the cost of an ambulance and possibly death benefits.
Personal accident insurance will most likely overlap with medical insurance or "personal injury protection" coverage included in your personal automobile insurance policy. However, you should check with your insurance carrier to confirm this and be aware of any additional prices or obligations, such as co-pays and deductibles.
Personal Effects Coverage
This coverage will pay for any personal goods left in the rental car that is damaged or stolen. The majority of homeowner's and renter's insurance plans will cover the same things. Unless you wish to avoid submitting a claim or paying the deductible on your renter's or homeowner's insurance policy, this coverage is typically unneeded. Always contact your insurance carrier to see what is covered.
Personal Car Insurance
If you own a motor vehicle, you are legally obligated to carry insurance coverage. As previously mentioned, most personal automobile insurance plans will give coverage identical to the liability coverage provided by the rental car business, and many will also include similar protections, such as comprehensive and collision coverage.
Some rental vehicle companies may ask for proof of insurance coverage from your personal automobile insurance policy if you decline liability coverage or the collision damage waiver (name of insurer and policy number, for example). Always check with your carrier to confirm and verify coverage issuer.
Credit Card Company Rental Car Insurance
When you rent a car using a major credit card, you may be eligible for free car rental insurance. In addition, your credit card provider may pay for any damage to your rental vehicle that happens during the rental period, depending on the conditions of your credit card agreement. However, liability coverage- perhaps the most crucial type of coverage- is rarely included with your credit card. Check with your credit card company to see what coverage is provided.
As has been stated, many of the types of insurance coverage that rental car companies will attempt to sell to you will be duplicative of things that are covered under your own motor vehicle insurance policy, assuming you have one. In addition, there may also be coverage afforded to you under your credit card company. Therefore, if you are considering renting a motor vehicle, it is very important to check with your insurance agent or company and your credit card company to determine what coverage you already have available to you. That way, you can make an informed decision as to what additional coverage, if any, you will need to purchase.
When you contact your motor vehicle insurance agent, you should also discuss your limits of liability for both liability coverage and uninsured/underinsured motor vehicle coverage. We suggest getting at least 250,000/500,000 in coverage and obtaining an umbrella or excess liability policy for at least $1 million. It would be best if you had the same limits for liability and uninsured/underinsured motorist coverage. We have seen far too many clients get seriously injured in an accident and not have enough insurance coverage to adequately compensate them for their injuries and damages. So, we suggest that you purchase the most insurance coverage you can afford.