Rental car accidents and insurance: What to know

What you should do after a rental car accident depends on who was responsible for the crash and what type of insurance coverage you have.

Andrew Hurst

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Andrew Hurst

Andrew Hurst

Senior Editor & Licensed Auto Insurance Expert

Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

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By

Ian Bloom, CFP®, RLP®

Ian Bloom, CFP®, RLP®

Certified Financial Planner

Ian Bloom, CFP®, RLP®, is a certified financial planner and a member of the Financial Review Council at Policygenius. Previously, he was a financial advisor at MetLife and MassMutual.

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If you get into a car accident while driving a rental car, for the most part you’d handle any claims much like if you were driving your own car. After the accident, your next steps would depend on whether you're covered by your own car insurance, by a coverage from the rental car company, or through your credit card company.

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No matter the specifics of your coverage, you'll have to contact the rental company and notify your insurance provider after a rental car accident (assuming you have your own car insurance). If you have to make a claim with your insurance company after a rental car accident, your rates will probably go up when it's time to renew your policy.

Key takeaways

  • After you're involved in a rental car accident, you would still document the damage, exchange information with the other driver, and call your insurance company (if you have car insurance).

  • Following an accident, you'll also have to contact the rental car company to make sure you complete any required steps.

  • Who caused the accident and what type of insurance coverage you have will determine how much you have to pay after a rental car accident.

  • Since rental car insurance and a collision damage waiver usually cover damage only after your own car insurance pays out, your car insurance rates may still go up after an accident even if you bought extra coverage.

What happens if you crash a rental car

After you're involved in a crash while driving a rental car, your next steps are similar to those you'd take if you had crashed your own vehicle. One main difference is that after a rental car accident, you should notify your insurer and the rental car agency to be sure you follow any steps they require.

If you crash a rental car, you should first check yourself and your passengers for injuries. After you've ensured the safety of everyone in your car, you can begin gathering any necessary information that you'll need to file a claim

After a rental car accident, you should:

  1. Exchange personal information with the other driver: Be prepared to share your name, address, license plate number, rental vehicle information, insurance company, and policy number with the other driver. 

  2. Document the accident with pictures and notes: Take plenty of pictures of the scene, including any damage to the vehicles. You should also take notes about the accident. If you take lots of pictures and make detailed notes, it will be easier to file a claim later.

  3. Contact your rental car company: Your rental car agreement may require you to contact the rental company after you're involved in an accident. The rental company will tell you what you have to do next, but expect to fill out an incident report.

  4. Let your insurance company know about the accident: After a rental car accident, you should call your insurer to find out how you're covered by your existing car insurance policy. Your regular auto insurance company can help you understand what you're responsible for paying and what to do next.

  5. Make an insurance claim: If the other driver was at fault for the accident, you will have to make a claim with their insurance company to cover any damage or expenses related to the accident.

→ Read more about what you should do after you're involved in an accident

Who covers the damage to a rental car if you have insurance?

It can be difficult to understand which company you're supposed to file a claim with after a rental car accident. You’ll need to contact both the rental car agency and your own insurer after an accident, and both should tell you how to proceed depending on the coverage you have. 

Depending on the circumstances of the crash and the coverage you have, you may have to file a claim with:

  • Your insurance company

  • The rental car insurance company

  • Your credit card issuer

  • The other driver’s car insurance company

→ Read more about how rental car insurance works

Your insurance company

If you're involved in an accident in a rental car, you should contact your insurance company — even if you don't think the accident was your fault. You may have to file a collision claim with your own insurer if you damaged the rental car. If you damaged another driver's car, they would file a claim with your insurance company.

In the event that you're responsible, your liability coverage will cover the costs of an accident you caused just like if you were driving your own car. If you're at fault in the accident, you may also be able to use your policy's collision coverage to repair or replace the damaged rental car.

The rental car insurance company

If you purchased any extra liability coverage from your rental insurance company, it may cover damage to the other vehicle involved in the car accident after you file a claim. Depending on the extra protection you bought, it could also cover damage to your own rental car.

When you buy rental car insurance, you pay for coverage that adds onto the minimum amount of liability coverage that rental car companies have to carry. There are four main types of coverage that you can add to a rental:

  • Supplemental liability protection (SLP): SLP adds to the minimum amount of liability coverage that comes with rental cars. If you have your own car insurance, you may not need to purchase extra supplemental liability insurance.

  • Loss damage waiver (LDW): Also called a collision damage waiver (CDW), this add-on increases the per-day cost of your rental, but covers any scratches, dents, or damages that you might cause to the car. It may also cover towing and maintenance fees. 

  • Personal accident insurance: Much like personal injury protection, this extra coverage pays if you or 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 or damaged while in the rental car. Typically, your home or renters insurance covers stolen items, even while you’re on vacation, so you may be protected even without adding personal effects coverage.

It's common for the extra coverage you get from a rental car company to be fairly expensive compared to regular insurance coverage. There's also a chance that the coverage you buy works as a form of secondary insurance and will only kick in after your own insurance pays for damages.

What is the difference between primary and secondary insurance coverage?

Your primary insurance is the first type of coverage that pays for damage after a claim, while secondary insurance only applies after you exhaust the limits of the primary coverage. Even if you can use secondary coverage to pay for damage or charges, you'll still have to file a primary insurance claim.

Your credit card's rental car insurance

Credit card issuers offer some rental car coverage (at no additional cost) if you pay for the rental car using that specific credit card. This benefit isn't uncommon, but insurance from credit card companies amounts to a form of a collision or loss damage waiver —  not liability coverage.

Additionally, the rental coverage granted by credit card companies often serves as secondary coverage, meaning it will fill in the gaps if you make a claim and your primary car insurance doesn’t cover the costs.

Before you rent a vehicle, you should check with your credit card company to learn what protections they offer in the state where you plan to rent a car.

The other driver’s car insurance

If another driver damages your rental car, you will file a claim with their car insurance company for the cost of any repairs. The other driver's car insurance policy will pay for your injuries and the damage to the rental, up to their policy's limits.

Unlike with an accident that's your fault, you wouldn't have to pay a deductible to repair the damage that someone else caused to your rental car. Unlike a collision claim — which covers damage to your own vehicle that you're responsible for — third-party liability claims don't come with any deductible.

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

Yes, your car insurance premiums may go up after you're involved in a rental car accident — even if you got extra coverage from the rental agency or through your credit card. The chances of your rates increasing after a rental car accident depend on how your vehicle was insured and who was at fault for the crash.

The cost of your car insurance is most likely to go up if you were responsible for the accident involving your rental car. In fact, Policygenius has found that an at-fault accident can raise your rates by 43%, on average.  

Even though you don't own the rental car, your rates would still increase after the accident because the other driver would file a claim with your regular car insurance company for the damage you caused.

Your rates may not rise if you don't have to file a claim with your regular car insurance provider. However, even if you purchased extra insurance with the rental agency or are using your credit card's collision damage waiver to pay for physical damage, as secondary forms of insurance, these protections may not offer any coverage until your existing policy has paid for damage.

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What happens if you crash a rental car without insurance

If you rent a car and are involved in an accident, you'll still be partially covered even if you don’t have your own insurance. Rental cars come with enough liability coverage to ensure that you're legally allowed to drive, even if the accident happens in a different state than the one you rented the car in. 

However, you would be responsible for paying for any damage that you caused once you reach the limits of your rental car company's liability insurance. For example, if you caused $30,000 of medical damage to the other driver while driving your rental, your rental car would also have to come with at least $30,000 of liability coverage for the other driver's bills to be fully covered — assuming you didn't purchase any extra liability.

You may also have to pay for the damage to your rental car company if you don't have a separate collision damage waiver from your insurer or from the agency itself.

Frequently Asked Questions

Can you refuse to pay for rental car damage?

Before you can rent a vehicle, you'll have to sign a contract that holds you liable for any damage to the car while it’s in your possession (the collision damage waiver is what excuses you from that responsibility). That means that if you refuse to pay for damage that's caused to your rental car, you could be sued for nonpayment.

How do you dispute a claim for rental car damage?

You can typically dispute a claim that you damaged a rental car by filling out a complaint form on the rental car company's website. Any documentation that you have on the car's condition while it was in your possession — like photographs — could help you win your dispute. You should also draft a letter detailing your intent to dispute the damage claims and send it to the rental car company. Be sure to follow up once you initiate the dispute process, too.

Can you fix a rental car yourself?

If you damage a rental car, you should not try to fix it yourself. You could violate your rental agreement by not disclosing the damage and trying to fix the car yourself. Once you violate your rental agreement, you expose yourself to fines and further expenses for the damage. If your rental car has a mechanical issue, don’t try and solve it on your own — just report the problem. The rental company will typically come and exchange it for a different one.

Author

Senior Editor & Licensed Auto Insurance Expert

Andrew Hurst

Senior Editor & Licensed Auto Insurance Expert

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Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

Expert reviewer

Certified Financial Planner

Ian Bloom, CFP®, RLP®

Certified Financial Planner

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Ian Bloom, CFP®, RLP®, is a certified financial planner and a member of the Financial Review Council at Policygenius. Previously, he was a financial advisor at MetLife and MassMutual.

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