Are Rental Car Accidents Covered by Insurance?
With spring in full bloom and summer just around the corner, many of us are already planning our next vacations or getaways. If your upcoming adventure requires the use of a rental car, or you simply need a temporary vehicle, it’s important to know how you will be insured in the unfortunate event you are involved in an accident.
At Berry Insurance, we often get questions from clients who have been hit in their rental vehicle or have hit another driver’s rental, and are unsure exactly how the claim will be covered.
So before you hit the road, read up on how accidents involving rented cars will be covered and if you will need to purchase additional insurance from rental car providers.
How are rental car accidents covered?
In most cases, if you carry your own auto insurance policy, your policy’s coverage will extend to you and your rented vehicle. So, if you are involved in a collision or another accident with your rental car, your current auto policy coverages and limits would still cover you. However, this coverage typically only extends within the US, Canada, and US territories - so it won't cover any international rentals.
Massachusetts drivers should know that in the event that they are involved in an accident with a rented vehicle that results in a liability claim, the rental car provider is required to cover a set amount of the claim. In Massachusetts, rental car companies must carry compulsory liability limits to cover medical costs and property damage from accidents involving their vehicles. For example, rental companies will have set limits that will cover $5,000 of any property damage claims, involving their rented cars. After the rental companies' required liability limits are exhausted, any remaining costs will be applied to the renter's personal auto or named non-owner policy.
Before you rent a car, speak to your insurance agent or provider to know exactly how they cover rental cars, as some insurers may have limitations on how much coverage long-term rentals can receive.
Loss of use:
One area your auto policy coverage may not extend is if you are charged for loss of use by the rental company. If you damage a rental car in an accident, the rental company may charge you for loss of use of that vehicle while it is being repaired.
While your auto policy will not usually cover this charge, there are endorsements available that you can add to your policy - such as Safety Shield Plus. Oftentimes, your credit card will provide coverage for loss of use as well, if you paid for the rental car with that card.
What is rental car insurance?
In certain cases, you may need to instead have rental car insurance to cover any accidents you are involved in in a rental car. Not to be confused with rental reimbursement coverage, rental car insurance is a separate policy coverage offered through a car rental company that would offer protections for the rented vehicle. This coverage will typically include:
- Liability coverage: This covers you for any medical bills or damage to another person’s property if you cause an accident while driving a rented vehicle.
- Loss/collision damage waiver: A collision or loss-damage waiver protects you in the event of damages that occur to the rental car, including vandalism and theft.
- Personal accident insurance: This offers coverage against injuries to you and your passengers while driving a rented vehicle.
- Personal effects coverage: Covers your personal property if they are stolen or damaged from your rented vehicle.
Do I need rental car coverage?
Usually you will not need to pay for separate rental car coverage. If you have an existing auto insurance policy, the policies coverage will extend to rented vehicles.
If you already have comprehensive, collision, liability, and medical payments/personal injury protection coverages on your auto policy, then paying for separate rental car coverage would likely be unnecessary. Your personal property in the rented vehicle would also be covered if you have a homeowners, renters, or condo insurance policy.
When should I get rental car coverage?
There are still some instances where having a rental car policy may be beneficial to you, even if you already have an auto insurance policy. Examples include:
- You want to avoid claims on your auto policy
- You don’t have collision or comprehensive coverage on your auto policy
- You’re traveling somewhere that your policy does not extend to
- You have high deductibles on your auto policy
- You have low liability limits on your policy
- You are renting a moving truck or van (auto won’t cover moving rentals)
What should I do after a rental car accident?
If your rental car is involved in an accident, or you hit another rental car driver, you should largely proceed the same way you would after any other auto accident. However, there are a few added complications to keep in mind when involving a rental car.
Follow these steps after an accident with a rental car:
- Get to safety: Pull the vehicle to the side of the road or move yourself away from oncoming traffic.
- Make sure everyone is okay: Check yourself and any passengers for injuries
- Dial 911: Receive attention for any injuries and to report the accident for records.
- Gather information: Exchange contact info with any other driver involved and record facts about the accident.
- Take photos: Snap some shots of any damages to your vehicle and any notable road conditions/obstacles.
- Contact the rental company: Report the accident to your rental car provider (if applicable), you will likely have to fill out their own accident report form.
- Contact your insurance agency or carrier: Regardless of fault, it is good to report accidents to your carrier and decide if you wish to file a claim.
Covering rentals
Now that you know more about your rental coverage options and what to do after an accident, you can set out in your next rental car with peace of mind that your insurance will have you covered.
Even with the full insurance coverage, it can be easy for any driver to feel overwhelmed after an accident. That’s why Berry Insurance is here to guide you through dealing with the claims process for any car accident big or small.
To learn more about how you should handle filing a claim on your policy and what to expect from the claims process, check out this guide: What Happens After a Car Accident? (MA Auto Insurance Claims Process & Timelines).