Rental Car Accidents
May 28, 2019
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Being in a motor vehicle accident of any kind is a stressful experience that can be compounded when a rental car is involved.Although they look the same on the outside as every other car on the road, it can be tricky to untangle questions of insurance, liability, maintenance, and other factors when rental cars are concerned. Whether rented for vacation, a business trip, a special occasion, or as a temporary stand-in while repairs are made, car rentals fuel a thriving industry. Estimates for last year put the U.S. car rental market’s annual revenue at more than $27 billion, with 2.181 million cars at 21,067 rental locations. Car rental agencies work by securing fleet vehicles that they loan out for a fee. Rental contracts are complex and include a number of conditions which can vary between companies. Common rules are that the car must be returned in the same condition, can be driven only a certain number of miles, can be operated only by the authorized driver who signed the rental agreement, and can be rented only to licensed drivers of a minimum age. Breaking any of these conditions can result in a host of problems, ranging from extra fees to voiding the contract.
Insurance plays a major role in renting a car.Each state requires a minimum amount of liability insurance on car insurance policies, so all insured drivers are already covered to some degree when it comes to bodily injury liability and property damage liability. Various forms of supplemental insurance and damage waivers are offered to renters, such as:
- Collision Damage Waiver (CDW) — covers the cost of damage from a moving accident. As the name suggests, non-collision based damage is often not covered.
- Loss Damage Waiver (LDW) — covers the cost of damage to the rental car in the event of an accident.
- Personal Accident Insurance (PAI) — covers medical costs and accidental death for the renter and passengers.
- Personal Effects Coverage (PEC) — insures against risk of loss or damage to the renter’s personal belongings.
- Supplemental Liability Insurance (SLI) — provides coverage where an accident causes bodily injury or property damage to someone other than the renter and passengers.
An rental car accident should be reported to the police just like any other.Medical attention should be obtained for anyone who is hurt and driver/insurance information should be exchanged. Each car rental agency has its own reporting process detailed in its paperwork that should be followed. Depending on the circumstances, a rental car accident may involve the renter’s insurer, the insurer of any other drivers involved, the rental car agency, and the credit card company. According to the Federal Trade Commission, if you do not buy CDW coverage or are not covered by your personal auto insurance policy, you accept responsibility for any damages and could be liable for the full value of the car. If you purchase CDW, your coverage still could be revoked if you damage the rental car while:
- driving in a negligent manner
- driving on unpaved roads
- driving out of state
- driving while intoxicated
- an unauthorized driver operates the car.