Whose Insurance Covers a Rental Car?

If you're in an accident, whose insurance covers a rental car? It depends on who is at fault unless you live in a no-fault state. You will also owe some legal responsibility to the rental company.

Free Car Insurance Comparison

 Secured with SHA-256 Encryption

Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses...

Full Bio →

Reviewed byJoel Ohman
Founder, CFP®https://res.cloudinary.com/quotellc/image/upload/insurance-site-images/ciccom-live/41b5e36b-joel-ohman.jpg

UPDATED: Jun 4, 2020

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We partner with top insurance providers. This doesn't influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Here's what you need to know...

  • If involved in an accident, driving a rental car doesn’t make you exempt from liability
  • If at fault, you will be held responsible, unless live in a no-fault state
  • Check with your insurance carrier to see if rental cars are covered under your current policy

If you’re driving a rental car and are involved in a collision with another car whose insurance is responsible for the damages? Does insurance pay for rental cars? If this were a privately owned or leased vehicle, naturally, the driver “at fault” would be responsible for the damages.

Because you are renting a vehicle (the rental company that legally owns these vehicles), you owe some legal responsibility to that entity.

Who is responsible for rental car damage? When you rent a car or a truck, you are responsible for any and all losses or damages that occur during your rental period.

Our FREE online car insurance comparison tool can help you find the perfect policy!  Enter your zip code above to get started!

The Truth about Rental Car Responsibility

 

Remember, you’re assuming responsibility for the rental car is not conditional. You are agreeing to take responsibility for whatever condition the car is in.  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.

Free Car Insurance Comparison

Compare quotes from the top car insurance companies and save!

 Secured with SHA-256 Encryption

Free Car Insurance Comparison

Enter your zip code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption

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.

However,  this is not always the case 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 a credit card, they are fully covered for any rental car damage. This couldn’t be further from the truth!

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 percent 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, 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. If you are involved in an accident, then always call the police to file a report.

This can help to determine fault and prevent you having to pay for the other negligent driver’s expenses.

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.

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 entering your zip code below to find a policy that’s right for you!

Free Car Insurance Comparison

Compare quotes from the top car insurance companies and save!

 Secured with SHA-256 Encryption