Does an accident in a rental car affect my insurance?

Yes, car accidents can affect your insurance rates even if you were driving a rental car at the time of the accident.

Kara McGinley

Kara McGinley

Published July 1, 2020

KEY TAKEAWAYS

  • If you used your own auto insurance as coverage for your rental car, your rates likely will go up if you file a claim after an accident

  • If you purchased rental car insurance coverage, you may be off the hook for paying for damage to the rental vehicle

  • Rental car insurance and credit card insurance can serve as secondary coverage after your own car insurance pays out, so your rates may still go up after an accident even if you sprang for extra coverage

Getting into a car accident can be scary and disorienting, especially if you’re driving an unfamiliar car. If you get into a car accident while driving a rental car, for the most part you’d handle things in the same fashion as you would if you were driving your own car. Similarly, getting into an accident in a rental car can lead to a rate increase just like getting into an accident in your own vehicle.

There are some extra steps you may need to take if you’ve been in an accident in a rental. When you rent a car, the car comes with a certain amount of liability coverage, typically the minimum requirements for that state.

If you have your own insurance policy, it likely extends coverage to rental cars. Rental car companies also sell extra insurance coverage that you can purchase if you want more protection. Your credit card company may offer rental car insurance as well, but you have to pay for the rental car using that specific credit card.

If you get into a car accident while driving a rental car, the insurance company you need to file a claim with depends on your policy and if you purchased extra coverage or not. An accident in a rental car could potentially raise your insurance premiums, but not always.

In this article:

Do your premiums go up if you get into an accident in a rental car?

Whether or not your insurance rates will go up after an accident in a rental car depends on how you insured your rental car. If you used your own auto insurance, and especially if you’ve been in accidents before, your rates will likely go up. Even though the rental car doesn’t belong to you, if you were using your own car insurance as coverage for the rental, you’ll file a claim with your insurance company — and when you file a claim, you risk a rate increase.

If you purchased rental car insurance as your primary insurance for the rental car and then got in an accident, your personal car insurance company may not raise your rates since you didn’t need to file a claim with them. However, this depends on your insurance company and driving history.

It’s important to note that once you file a police report for a car accident, the accident will be on your motor vehicle record. So just because it doesn’t currently raise your car insurance rates, if you apply for new car insurance in the future the accident will appear on your record, which could mean higher rates when shopping for new insurance.

If the rental car insurance you bought was just secondary coverage, that means your personal auto insurance needs to pay for the damage first, and then your secondary rental insurance coverage will kick in. Since your insurance still has to pay, your rates may go up.

The same goes for rental car insurance through your credit card. If you used credit card insurance as your secondary coverage for the rental car, you’ll still need to file a claim with your own insurer, which may raise your rates.

What to do if you get into a car accident in a rental car

If you get into an accident while driving a rental car, don’t panic. As always, the first thing you should do when you get into a car accident is check yourself and passengers for injuries, and get to safety by pulling over to the side of the road if possible.

You should then follow these steps:

  • Call 911 - Even if no one is injured, police will file a police report of the accident, which you might need when filing a claim
  • Exchange and collect information - If the car accident involves another driver and vehicle, exchange information with them. Details like your names, addresses, license plate numbers, vehicle information, insurance companies, policy numbers, and the information of any witnesses who were present
  • Document the accident - Photograph all the damage to both vehicles, as well as any injuries you or your passengers have. Documenting the accident will make filing a claim easier

Once you’ve done all of the above, normally you would contact your car insurance company. But if you get into a car accident in a rental car, you might want to contact the rental car company first. They may provide towing or roadside assistance, depending on the company.

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How to file a claim if you get into an accident in a rental car

When you call the rental car company after an accident, they’ll tell you how to proceed. Sometimes rental cars have emergency numbers on a sticker inside the glove compartment, along with the car insurance policy.

Make sure you read the fine print of the insurance policy, or any extra coverage you bought. You should then contact your insurance company. It’s a good idea to contact your insurance company even if you did purchase rental car insurance. Insurers typically want to be notified any time you get into a car accident, even if you won’t be filing a claim with them.

Filing a claim with your insurance company

If you did not buy extra coverage, and used your own auto insurance policy to cover the rental car, you should contact your insurance company to file a claim. To know if your car insurance policy extends to rental cars, check the “definitions” section of your policy.

Typically, you would file a claim with your own insurance company just like you would if you got into a car accident in your own car, and if you are at fault for the accident, your insurer will pay the rental car company for the repairs to the vehicle, up to your policy’s limit.

Your liability coverage will cover the costs of an accident you caused just like if you were driving your own car. If you have collision coverage, your insurance can pay if your rental car is damaged in an accident, no matter who is at fault, but you will first need to pay your deductible.

Just like if you got into a car accident while driving your own car, filing a claim for an accident with your insurance company may raise your rates.

Filing a claim with a rental car insurance company

If you purchased extra coverage from your rental insurance company, you may be off the hook for paying for repairs after an accident. However, be sure to read the fine print of your contract with them, things can get a little tricky when it comes to rental insurance coverage.

The extra coverage you purchased may cover damages to the other vehicle involved in the car accident, plus damage to your rental car and medical expenses. That said, there is also a chance that the coverage you bought is secondary coverage, and will only kick in after your own insurance pays.

Rental car insurance policies, just like regular car insurance policies, offer different components of coverage that offer different forms of protection. There are four main types of coverage that you can add to your rental insurance policy.

  • Supplemental liability insurance: Just like regular liability coverage</define, supplemental liability insurance will cover the cost of injuries and damages that you cause to another driver and their vehicle. if you have your own car insurance, you may not need to purchase extra supplemental liability insurance.
  • Loss damage waiver (LDW): Also called collision damage waiver, this add-on pays for any scratches, dents, or damages that you cause to the rental car. It may also cover towing and maintenance fees. If your rental car is stolen, your loss damage waiver can help financially protect you. If you have comprehensive and collision coverage in your own policy, you may not need to purchase an LDW.
  • Personal accident insurance: Much like personal injury protection, this extra coverage pays if you are your passengers are injured in a car accident while driving a rental car. If you have PIP, or a robust health insurance plan, you may not need to purchase personal accident insurance.
  • Personal effects coverage: This pays if your personal belongings, like your laptop or other valuables, are stolen from the rental car. If you have home or renters insurance you already have personal property coverage.

When filing a claim with a rental car insurance company, they may charge you a daily fee for the days the rental car is in the repair shop.

Filing a claim if you used credit card rental car insurance

Certain credit card companies offer rental car insurance coverage if you pay for the rental car using that specific credit card. Credit card rental car insurance often serves as secondary coverage, meaning it will fill in the gaps when your primary car insurance doesn’t cover the costs.

That said, depending on your card and the state where you rent the rental car, your credit card rental insurance can also serve as the primary insurance when renting a car. You should check with your credit card company to learn their protocol for the state where you are renting a car.

About the author

Insurance Editor

Kara McGinley

Insurance Editor

Kara McGinley is an Insurance Editor at Policygenius. She previously worked as a freelance writer and a copywriter for various startups. Her work can be found in Teen Vogue, The Culture Crush, Mask Magazine, and more.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

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