What Happens if You Crash a Rental Car Without Insurance?

What Happens if You Crash a Rental Car Without Insurance?

While renting a car for a short term, usually for a vacation or business trip, many people choose not to buy insurance to bring down the cost of the rental.

Renting a car, even for a few days, can be expensive, and buying insurance for the rental vehicle can almost double the rate, especially if you take full coverage. 

car in a globe covered with hands

Why People Choose to Not Buy Insurance for a Rental Car

Since insurance for a rental car is expensive, it’s understandable if you’re reluctant to purchase it.

A lot of people feel it’s unnecessary since they will only have the vehicle in their possession for a short time, leaving them with very little time to have a crash or for something to go wrong.

Why Is It Necessary To Buy Insurance for a Rental Car

Unfortunately, it doesn’t always go as planned. Accidents with rental cars are widespread as more people travel between states and rent cars.

Reasons for car accidents with rental vehicles include:

  • Being unfamiliar with the surroundings
  • Not knowing the local traffic laws
  • Using a cell phone while driving
  • Not getting enough sleep before driving
  • Consuming alcohol or drugs
  • Being unfamiliar with the rental car

In most cases, you rent a car when visiting a new town, city, or state, so you’re unfamiliar with the roads and traffic laws.

When navigating through unknown streets, you need extra focus, and distractions like cell phones or not getting enough sleep can be the reason you have a crash easily. 

Another common reason drivers crash rental cars is that they’re unfamiliar with the vehicle.

When you drive your own car, you know exactly how it operates, how much pressure you must apply on the brakes, how smoothly it turns and how fast the accelerator is.

Even an experienced driver can cause an accident because they are not familiar with how a different car works. To prevent a crash, the best thing to do is to concentrate while driving. 

Male hand drawing a car

You’ve Crashed the Rental Car Without Buying Insurance

Since car rental companies have minimum liability insurance, you will be responsible whether or not the accident was your fault, as the terms of the rental contract stipulate that you return the car in the condition you received it.

You have a few options if you’ve opted out of buying rental car insurance and crashed the vehicle. You may be covered by one of the following:

  • Personal Insurance

Hopefully, you have some kind of insurance that will cover rental car damages.

Before purchasing any kind of insurance, comparing quotes on sites is helpful so that you are aware of precisely what you’re getting. 

  • Car Insurance

If you own a car, it’s a legal requirement to have insurance. The basic insurance type that’s mandatory in most states is liability insurance.

Liability cover protects you if you’re responsible for a crash by covering the damages and injuries caused to the other party.

Toy truck filled with coins

Your liability coverage often covers you when you drive a rental car, but check if your insurance provider allows that before renting a car. Also, ensure that it’s valid if you are in a different state.

Most drivers have collision and comprehensive cover over and above liability, and it provides more protection if you’ve crashed your rental car.

Again, you must read the terms of your insurance contract to confirm that your collision and comprehensive insurance will cover the rental car, and if it does, it includes all states.

Collision and comprehensive cover will pay for damages or losses to the rental car.

You will have to pay the deductible on your insurance, though, and some insurance companies will charge you a fee for every day the vehicle can’t be used while it’s being repaired.

Depending on your insurance, they might pay these fees, so check the details of what your policy covers. 

Graphic of a highway

 

  • Homeowners Insurance

You may think that homeowners insurance will only cover losses or damages within your home, but it often extends to personal property outside the house too.

While it won’t cover damages or losses to the rental car, it might pay for any personal property that was lost or damaged in the rental car.

For example, if the rental car’s window was smashed and a valuable item of yours was stolen, your homeowners’ insurance might pay for the loss of your item but not pay to fix the broken window.

If you have homeowners insurance, check what it covers and in which states before you travel. Some homeowners insurance will cover items stolen from or damaged in a rental car

  • Health Insurance

Lastly, check the terms of your health insurance, personal injury protection, or medical payments coverage.

Your health insurance and personal injury protection will likely cover you if you get hurt in an accident.

At the same time, medical payments coverage will pay for the medical bills for you and your passengers, whether the crash was your fault or the other driver’s.

Like the other insurance types, you must check what these policies cover and in which states. You will have to pay the deductible if there is any. 

Rent a car inscribed on a keyboard

Insurance Offered by Your Credit Card

Most rental car companies require you to book and pay using a credit card rather than cash.

When paying with your credit card, you may automatically have rental car insurance, but you must check with your credit card company to be sure of what the insurance covers. 

Often, credit card insurance does not cover liability which means you will be responsible for damages and injuries caused to the other car and driver if the crash was your fault.

Credit card insurance may also not cover luxury cars and can be limited to vehicles with less than eight seats.

Before renting a car, contact your credit card company to confirm what their rental car insurance covers.

If they offer high coverage, they will handle the entire claim should you be involved in an accident. It means you don’t have to file a claim with your car insurance company.

However, if the credit card only offers low coverage, you will be required to put in a claim with your insurance first and risk your premiums going up. 

Bikini lady stand by a red sport car

  • Company Insurance

If you’re on a business trip and crash a rental car, your personal car insurance is unlikely to cover the expenses. Apart from commuting to and from work, you need additional coverage for any business travel.

Most companies that require their employees to travel will have insurance to cover accidents and injuries, so before renting a car for work purposes, it’s best to get the details of what the company’s insurance will cover. 

What to Do if You’re Involved in an Accident with a Rental Car

Accidents happen, and being involved in an accident in an unfamiliar place with a rental car is highly stressful.

If you’re crashed, pull over to the side of the road, and after making sure that everyone is alright, you must do the following:

  • Call the police

Even if it’s a minor accident, you will need a police report to file an insurance or a personal injury claim.

  • Exchange contact details and insurance information

You must get the other driver’s personal information, including their full name, address, contact number, and email address.

Make a note of this information, like the name of their insurance company and policy number.

Also, confirm that they have a driver’s license – get their driver’s license number, vehicle registration number, and license plate number and make a note of the make, model, year, and color of the other car. 

If there were witnesses on the scene, you should get their contact details too.

Wooden stamp with Insurance inscription

  • Take pictures and gather evidence.

Take pictures on your phone of all damages to your car and the other car, damage to property, and any visible injuries.

Also, take photos of anything related to the accident, like skid marks, obstacles, obstructions, traffic lights, or signs.

Take note of everything related to the accident, including the street name it took place on and what caused it. 

  • Contact the rental car company.

You must inform the rental car company that you’ve met with an accident as soon as possible. You can find their emergency number in the glove box, on a sticker on the windshield, or on your rental contract. 

The rental company will probably need you to fill out their incident report, which will include the information collected above.

  • Phone your insurance company or the credit card company

Since you didn’t buy rental car insurance, you will have to claim damages from your personal insurance or the credit card company.

Find out what they require for you to file a claim and what the deductible is if you don’t already know. Like the rental car company, your insurance or credit card company will need all the details related to the accident. 

Conclusion

Accidents can happen, even in a rental, so buying insurance for the rental car can save you from outlying money if you’ve been in a crash.

If you’ve opted out of purchasing insurance, you may be able to claim from your other insurance policies, like your own car insurance or your personal or homeowners insurance.

You can also claim your credit card insurance or, if you had rented the car for work, your company would likely have a cover. 

If you’ve been in an accident, you must get all the necessary information from the other driver, gather evidence, call the police and inform the rental company as soon as possible. 

Hands holding a red toy sport car