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Whose insurance is responsible for an accident with a rental car?

This is a tricky question; if you drive a rental car, but are involved in a collision with another car, whose insurance is responsible for the damages? If this were a privately owned or leased vehicle, naturally, the driver “at fault” would be responsible for the damages, unless you live in a no-fault state. However, when you rent a car, you take on a very different arrangement.

Because you are renting a vehicle from what is, basically, an individual entity (the rental company that legally owns these vehicles) then you owe some legal responsibility to that entity. When you rent a car or a truck, you are responsible for any and all losses or damages that occur during your rental period.

This is why the rental company will take a careful look at the car before giving you the keys. They will compare the vehicle’s condition before you leave with the final condition after you turn in your keys.

The Truth about Rental Car Responsibility

Remember, your assuming of responsibility for the rental car is not conditional. You are agreeing to take responsibility for whatever condition the car is in—even if it is vandalized or destroyed in a natural disaster. The same principle holds true if someone else collides with you. Even though the accident might be technically their fault, you will still be responsible for any damages incurred, according to the rental company.

The only exception to this rule is if you accept and sign a collision and loss damage waiver contract offered by the car rental company. This contract states that in exchange for a fee, the driver will not held be responsible for damages that are accidental or unpreventable.

What about the issue of liability?

If you currently pay for liability coverage or full coverage on your home vehicle, then sometimes, the same coverage will apply for your rental car. This is not always the case, however, and this can be an expensive mistake to discover long after you take that first drive. Under a very generous policy, liability coverage follows the owner, even if he or she is driving a rental car. Needless to say, not all rental coverage policies are that generous. Some policies only agree to pay liability insurance for insured cars, not just their drivers.

Credit Cards and Rental Cars

What commonly happens is that over-confident auto renters assume that because they have liability insurance, and because they have a credit card, they are fully covered for any rental car damage. Wrong! Only some credit card companies completely cover car rental arrangements, while others make conditional promises, and some do not cover rentals at all. Even if you have a credit card company backing your rental car, do not assume that they will pay for 100% of all damages that you incur during your trip.

Credit card insurance is usually supplemental insurance by nature. That means that the company will reimburse you for whatever damage is not covered by another insurance policy. If you are responsible for damaging someone else’s vehicle with your rental car then you will have to pay for those damages as well. If someone injures you because of their negligent behavior, and fault can be attributed to them, then their insurance company will have to pay for your medical expenses.

If you live in a no-fault state, then your insurance company must pay for the expenses. In regards to property, however, the only person you answer to is the rental company, because this is the party you first made the agreement with.

Always Make Sure of the Facts BEFORE You Drive

The car company will not cover any damages unless you purchase additional insurance policies, like personal effects coverage. If you are involved in an accident, then always call a policeman to the scene to file a report; this can to help determine fault and prevent you having to pay for the other negligent driver’s expenses.

The lesson is, always know what coverage you have before your rent and drive. Get this information from your liability insurance coverage, your car rental agreement, and your credit card company. Never assume that you are fully covered by one or more of these parties. The name of the game of insurance is to get it in writing. Rest assured, when it’s time to pay up, each and every company you work with will try to avoid making payment if there is any loophole they can find.

You do not have to buy an insurance agreement directly from the rental company. You can find independent rental insurance companies online. Get started right now by using our free car insurance comparison tool on the web to find a policy that’s right for you!

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