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What Happens in a Rental Car Accident Without Insurance?

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Traffic accidents in rental cars are inevitable in the travel industry, and many safety devices have been created to make rental cars safer for those people on vacation who decide to rent a car. Even so, a car accident in rental car situations is still extremely dangerous and happens all too often in the United States – there is one car accident every 15 seconds. Worldwide, 1.2 million people die each year in traffic accidents.

These numbers are staggering, and unfortunately we see the results of car accidents (major and minor) everyday here at Avrek Law. If you have been in a rental car accident without insurance, it is always in your best interest to contact an experienced auto accident attorney to discuss your claim.

What Does Your Personal Car Insurance Cover?

The insurance that covers your own car is the first line of protection to cover a rented vehicle. Never drive without insurance in California – period, and it’s advisable to maintain car insurance in all other states as well. This gives you basic liability coverage for minor damages to a rental car you could cause to other people in an accident. If you do not own an automobile and, therefore, do not have vehicle insurance, you can and should buy a temporary or annual insurance policy from an insurance company. Such a policy should be reasonably priced.

In order to protect a rental vehicle, your personal insurance must also have collision coverage (which covers damage to your own vehicle because of an accident with another vehicle or object or by rollover) and/or a comprehensive coverage (covering damage to your vehicle caused by causes other than a collision, such as fire, theft, vandalism, flooding, fallen tree branches, etc.). Third party CDW insurance (Collision Damage Waiver) is additional insurance offered to someone renting a vehicle.

If you have any of these coverages, check the text in the small print to know exactly what the coverage involves, or call one of the representatives of your insurance company’s customer service and ask the specific details of your policy.

Does Collision Damage Waiver Cover Third Party Drivers?

Car rental companies offer a wide variety of alternatives to secure a rental car. There is insurance that is necessary to take, and others that are optional, depending on the use that we are going to have for the vehicle, the budget we have and the personal tranquility we need when driving a rental car.


Collision Damage Waiver or Loss Damage Waiver insurances cover damages for thefts or accidents that we may have during the time of the rental of the vehicle. These insurances are offered with and without franchise. In insurance with franchise, the insurance company is responsible for covering up to a certain amount and after that amount, the difference is charged to the insured. In the coverage without franchise, it is the insurer that covers all of the damages.

You may be wondering: What does CDW insurance not cover? What does LDW insurance not cover? CDW and LDW insurance do not cover damages caused to third parties.

It is important to know that the coverage offered by insurers is void in cases where the person who rents the car has shown negligence in the use of the vehicle, which includes driving under the influence of alcohol or drugs, loading the wrong fuel, etc.

This additional insurance costs an average of $27-$30 per day when purchased directly at the rental company’s counter.

Main Causes of Rental Car Accidents

Insurance adjuster looks at damaged rental car after accident.

The increase in the number of rented vehicles has grown immensely over the last decade, which inevitably leads to a growth in traffic accidents related to rental cars.

There are a few main causes of these accidents:

  • Not making sure the rental car is in a good condition.
  • Drinking alcohol or using drugs before driving.
  • Driving too fast.
  • Not respecting pedestrians.
  • Not sleeping properly before you are about to drive.
  • Not keeping a safe distance from the vehicle in front of you.
  • Using the cell phone or anything that can distract you while driving.
  • Ignorance of local traffic laws.
  • Not knowing the surroundings.

What To Do After a Rental Car Accident?

In case of an accident, it is essential that you contact the rental company immediately. They will guide you through the steps to follow regarding how you must deal with the accident and contact the authorities depending on the seriousness of the incident.

It is the client’s right to receive another car of similar characteristics to the previous rental – according to availability – when the vehicle involved in the accident cannot be driven safely. In turn, in its discretion, the rental agency can refuse to deliver a replacement car and terminate the rental contract if there is evidence that the damage to the vehicle was due to misuse on the renter’s part or if they broke any rental conditions (driving on unpaved roads, driving under the influence of prohibited substances, etc.).

To make insurance coverage effective, keep in mind that it is mandatory to deliver the accident and/or police report to the renter. It is also good to know if the assistance rate on the road is included in the price, unless it is explicitly stated otherwise in the rental conditions.

Read an in depth article about what to do after being involved in car accident or as a passenger in a crash.

Do I Need a Police Report?

Having a police report after rental car accident is one of the most important pieces of information you’ll need when dealing with major or minor damage to a rental car. This report can be a powerful asset in any claim you want to file with your insurance company, and a police report will state the facts of the event and determine who was at fault. Be sure to ask for a copy of the report after it’s filed by the police officer.

Extra Insurance From Credit Card You Paid With

It is important to know that different car rental companies can put special codes to their insurance, but there are three main codes to note:

  • Stolen vehicle
  • Crashes
  • Damage from or to third parties

The credit card used to pay for a rental car may have additional insurance protection on it, too. However, that extra insurance only covers crashes and vehicle theft, and do not cover any third party damages, which is important to know because the value of an accident can far exceed the value of the car in case of theft or total loss.

Third-party damage insurance covers accidents that involve other people, either drivers or pedestrians. Additionally, there are special conditions for credit card insurance coverage such as that they do not cover certain luxury cars and cars can only have a maximum of eight seats. The specifics of a credit card’s insurance coverage can be verified by reading the Visa or MasterCard conditions on their website.

Can a Rental Car Company be Liable?

Although most cars are rented with coverage without franchise and will protect you in different eventualities, under certain circumstances you may run out of coverage. An example of this is if after an accident it is proven that you have driven under the influence of alcohol or prohibited substances. In this case, no insurance will cover the damages and the renter will be fully charged the amount of damages.

Other damages that are not covered by insurance include furnishing the car with wrong fuel, losing the keys and, in general, all that may come from obvious negligence on the part of the contract holder. If a rental company is proven guilty of renting a car with mechanical problems, it can be held accountable for the damage if you file a lawsuit.

Worst Rental Car Companies

A study found that the top three brands for overall satisfaction among those renting a car were:

  1. Enterprise
  2. National
  3. Alamo and Hertz (tied)

The same study showed the three worst rated companies to be:

  1. Dollar
  2. Thrifty
  3. Budget

So, how do you find the right rental car company? To begin with, you should read all the fine print in the rental contract and know what taxes you are expected to pay. Also request that you are given the type of car you asked for or be given a free upgrade, and avoid useless add-ons like prepaid gas.

Finally, think whether you really need to rent a car at all. After considering the extras involved, like parking fees, fuel and valet gratuities, you might just opt for public transportation instead.

Filling a Claim After a Rental Car Accident – Do I Need a Lawyer?

After experiencing an accident in a rented car (and having back pain, whiplash, broken bones, or even internal injuries), the compensation will be immobilized until the amount of damages is determined. Rental car companies usually take between 30 and 60 days to give you an answer, although it could be less.

If you lose the claim, but were insured by a third party (your personal policy, credit card or an outside car insurer), keep in mind that it generally does not work like other policies that have an understanding between insurers – you will have to pay whatever you need to pay and then ask the insurer for the money after the fact.

The important thing to know is that you will not have to pay more than your insurer (except maybe management expenses) because that the responsibility is of the company.

When you have been involved in a car rental accident without insurance, you should hire a lawyer experienced in rental car accidents to help you start a lawsuit. Having a personal injury lawyer could determine whether you get any compensation or not.

With more than 50 years of combined experience, Avrek has recovered more than $1 Billion in compensation for injury victims in over 45,000 cases. We’re here to help you get the compensation you deserve – view our locations, or contact us for a free consultation to learn more!

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