How Do Insurance Policies Handle Accidents Involving Rental Cars?

Renting a car makes travel easier, but it makes accidents a bigger headache. If you’re involved in an accident where either you or the other driver have a rental car, call a San Antonio car accident attorney for a free consultation right away. It’s important to dig into the details as soon as possible to make sure your rights are protected and investigate all avenues of potential compensation that are open to you.

From a San Antonio Car Accident Attorney: Insurance Policies and Rental Cars

Texas law requires all drivers to have at least basic liability insurance of $30,000 per person for bodily injury, $60,000 per accident for bodily injury, and $25,000 for property damage. This 30/60/25 minimum applies whether you’re in your own car or a rental, but if you’re renting, the company has to provide this minimum liability by law as part of the rental agreement. The problem is that this minimum is often not enough for serious accidents.

That’s why your personal policy or add-ons can really matter. Rental cars aren’t treated much differently from regular vehicles under Texas insurance laws, but the key is layering your coverage. For most of us, our personal auto insurance usually extends to rentals and acts as primary coverage for liability if we’re at fault. But this isn’t necessarily a given: it’ll depend on the actual policy, and there are often limits on the type of rental car or how long it can be rented. If you do a long-term or business rental, personal insurance likely won’t apply.

Rental companies also push their own insurance products to fill in the gaps, and credit cards can offer secondary protection. Particularly excellent credit cards may even offer injury insurance and liability insurance, up to certain limits, but this will, again, completely depend on the credit card and the specific agreement they have with their  cardholder, whether that’s you or the other driver. And, of course, you have to have actually rented the car with that particular credit card for the coverage to apply.

Your Personal Auto Insurance

Your own car insurance is often the first line of defense in a rental accident. In Texas, if you have liability coverage on your personal policy, it typically extends to any rental car you’re driving, within limits, and this means that if you cause a crash, your policy pays for the other party’s injuries and property damage up to your limits. If those limits are higher than the state’s minimum, you’re better protected. For damage to the rental car itself, your collision and comprehensive coverage will apply. You’ll have to pay your deductible first, of course.

Your insurer or the car rental insurer will likely cover your initial bills if the other party is at fault, but they’ll go after the other party and their insurance to get reimbursed. If you bring a personal injury claim, they will likely put a lien on your claim to ensure they’re paid for whatever they shelled out at the time of the accident.

As for injuries to you and your passengers, if you have personal injury protection (PIP) or medical payments coverage, that can help with medical bills regardless of fault. Uninsured/underinsured motorist coverage steps in if the other driver lacks enough insurance, but beware: not all such policies automatically cover rentals. If you’re worried about this, it’s smart to call your insurer before renting to confirm.

Insurance Options from Rental Companies

At the rental counter, they’ll offer you several add-ons, and these can be lifesavers or totally unnecessary expenses, depending on the kind of coverage you already have. The main ones you’ll see offered are the Loss Damage Waiver (LDW) and Collision Damage Waiver (CDW). Technically, these aren’t actually insurance but waivers where the company agrees not to charge you for any damage to the rental if it’s stolen or wrecked. These waivers typically cost between $10-30 per day, but they can save you from paying any repair bills. If you have collision on your personal policy, you might skip this, but remember your deductible.

Then, rental companies often offer Supplemental Liability Insurance (SLI). This pushes the liability coverage their insurer offers beyond the state minimums and often up to $1 million. These are very useful if your own personal limits are low. If you’re hit by a driver who has a rental, it can be a lifesaver for you as the victim if they got SLI coverage, so be sure to doublecheck on that. Personal Accident Insurance (PAI) is another offering, and it covers medical expenses for you and passengers. If you have health insurance or PIP, this might just be duplicate coverage for you, though.

Texas doesn’t require you to buy any of these policies or waivers, but declining means you’re on the hook for damages unless your own coverage applies. Always rent smartly by checking your insurance coverage before you rent and also checking what your credit card might cover.

Credit Card Coverage for Rental Cars

Many credit cards offer rental car protection as a perk, but it’s usually secondary and limited, meaning you’ll turn to this last and only if there’s nothing else. Most of these coverages don’t cover injuries or damage done to others if you’re liable for the accident, and the same applies if someone else causes the accident. Their credit card coverage is unlikely to be something you can call on for your losses and damages.

What Happens If You’re At Fault in the Accident?

If you cause the crash, your personal liability insurance will usually be the primary one to cover the other party’s damages. For the rental car itself, your collision coverage should pay after the deductible, or if you bought CDW, the rental company handles it.

What If Another Driver Is At Fault?

If someone else causes the accident, their insurance should cover your damages, including medical bills, lost wages, and rental car repairs. If they’re the one driving the rental, then you may find yourself having to deal not just with their insurance but also with rental company insurance. If you’re the one with the rental car, the rental company should bill the at-fault driver’s insurer for their losses.

Steps to Take After a Rental Car Accident

You need to act fast to protect your claim and get things sorted out. First, check for injuries and call 911 if needed. Then move yourself and others to safety, and your vehicles as well, if possible. Exchange info with all other drivers. Get names, contact information, insurance info, and vehicle details. Document the scene by taking photos of vehicle damage, the road conditions, and any injuries. Get witness statements if possible, and then be sure to get a copy of the police report.

Then, call your auto insurer and, if applicable, your credit card company. If you didn’t go straight to the hospital, go as soon as you can afterward and be sure to get copies of all records, bills, receipts, and communications with healthcare providers.

Working With a Car Accident Lawyer

Dealing with a rental agency’s insurance company is also no walk in the park. These are typically powerful companies with a vested interest in minimizing claims and shifting blame whenever possible. And when there’s layered coverage involved, insurers are quick to dispute coverage or fault and continuously delay things hoping someone else will pick up the tab. A lawyer will be aware of all these potential issues and protect you from them while keeping your claim moving and fighting for the compensation you deserve.

For help with your car accident claim, talk to the Gamez Law Firm now in San Antonio, Houston, Austin, Laredo, or McAllen today.