Who Pays for Rental Car Damages After an Accident?

Accidents involving rental cars tend to make for especially complex civil litigation and insurance negotiations, even if nobody ends up seriously hurt as a result of the wreck. Because you are not the lawful owner of the rental car involved, your financial liability for damage caused to it—as well as injuries caused to other people caught up in the incident—may change substantially depending on the circumstances.

Determining who pays for rental car damages after an accident is generally much easier with guidance from an experienced auto accident lawyer. That being said, it can be helpful to understand in advance how different insurance coverages may apply to different rental car wrecks based on who is involved and what kinds of policies they bought into.

Rental Company Insurance Coverage

Everyone who has ever rented a car under any circumstances is familiar with the standard sales pitch of extra insurance coverage from the representative at the rental desk. Most of the time, it seems more than reasonable to save a little money in the short term by not accepting these additional fees, especially if you are only renting a vehicle for a short period of time.

If you do choose to opt into this insurance coverage, though, it could make things much simpler—and less impactful on your own wallet—if you do happen to get into an accident. Depending on what coverage options a particular rental company offers, the company itself might assume some or all costs associated with a crash regardless of who is at fault for it, from vehicle damage to personal injuries, to even loss of personal property as a result of the wreck.

However, it is crucial to understand that most rental insurance options are not all-encompassing—in other words, you would need to pay a lot in fees to have complete coverage for every possible loss stemming from a rental car accident. If insurance options provided by a rental car company do not apply, your own personal car insurance will likely kick in instead.

Insurance Coverage from Other Sources

While many personal car insurance policies can be applied to rental car accidents that do not involve the policyholder’s personal vehicle, the extent to which that policy will cover all damages associated with that wreck will vary depending on each policy’s specific terms. For example, if you have purchased only the minimum amount of liability insurance required by the laws in the state of primary residence, it would likely only cover certain losses sustained by another party in a rental car wreck, and not any of your own injuries or the damage caused to the vehicle you rented.

Likewise, deductibles and coverage limits that would apply in a wreck involving your personal vehicle would also apply to rental car accidents, so you may still be personally liable for certain rental car damages before your policy kicks in. Finally, many U.S-based car insurance policies do not apply to accidents abroad, so if you rent a car in another country and then get involved in a crash, you may not have any coverage whatsoever from your stateside car insurance provider. It is worth noting, though, that some credit card companies offer insurance for cardholders who use that card to secure a rental vehicle.