What to Know About Rental Car Damage Liability After an Accident
Renting a car adds freedom and convenience to any trip, but things can get complicated if an accident happens. So, who pays for the repairs if your rental car is damaged in an accident? Here’s what you should know, including advice from industry experts and real-life cases.
Who Pays for Rental Car Damages?
When you’re in a rental car accident, there’s often a lot of confusion around who is liable for damages. A recent case in Melbourne shows just how expensive an accident can be. In October 2024, Mark Jensen hit a kangaroo while driving a rental MG SUV on holiday. Initially, he paid over $5000 for the repairs, only to receive an additional bill for $10,000 from the rental company. He claims he was not clearly informed about the repair costs, calling the charges “extortion.”
The rental company, however, clarified that terms and conditions, including “inclusions and exclusions,” are provided to customers at booking and pick-up. This raises the question: What exactly are the liability rules, and how much can a renter expect to pay?
What to Do If You’re in a Rental Car Accident
After ensuring the safety of everyone involved, it’s important to document the accident. Take photos of the damage, exchange contact details with any other parties involved, and contact the rental company. Rental companies like Europcar offer 24/7 support and will guide you on next steps, including whether the car can still be driven or if it requires towing.
Understanding Rental Car Liability and Coverage
Typically, if the accident involves third-party damage, the at-fault driver is liable. According to Europcar, if you’re at fault in a rental car accident, you’ll pay up to the excess amount unless there’s a breach of contract (e.g., driving under the influence). If the repair cost is less than the excess, you’ll only pay for the actual repairs. Many rental companies also offer additional coverage plans to reduce the excess, but terms vary between providers.
For example:
- Hertz: Their Loss Damage Waiver (LDW) removes the renter’s financial responsibility for damage if they were not driving in a prohibited manner.
- Personal Insurance: In some cases, your personal car insurance may cover rental car damages. Allianz Insurance, for example, provides coverage for customers driving rental cars as a substitute for their own vehicle, and in cases where the rental is provided due to an Allianz claim, they cover up to $2000 in excess or bond fees.
Fine Print Matters: Read the Rental Agreement
The NSW Government advises reading the rental contract carefully, as some agreements may limit coverage. For instance, coverage may be void if the driver isn’t listed on the rental agreement or if the driver admits fault. Checking the fine print is essential, as each company has specific policies for coverage inclusions and exclusions.
What Happens if the Rental Car Is a Write-Off?
If a rental car is deemed a total loss or "write-off" in an accident, you may still only pay the excess amount stated in the rental agreement—provided you didn’t breach the contract. Europcar’s policy, for instance, requires at-fault drivers to pay the excess if they’re responsible, without impacting the driver’s personal insurance. Similarly, Allianz covers policyholders who write off a rental car if it’s used as a substitute, applying standard excess fees.
Key Takeaways
The financial responsibility for rental car damages after an accident varies by situation and coverage. Here are some tips to stay prepared:
- Review the Rental Agreement: Familiarize yourself with the contract, including coverage terms, before driving away.
- Consider Additional Coverage: Rental companies offer options to reduce excess fees for extra protection.
- Check Personal Insurance: Your car insurance may extend coverage to rental vehicles, so review your policy.
Being informed about rental car liability can help avoid unexpected costs if an accident occurs, so you can drive confidently and enjoy your trip with peace of mind.