There are multiple reasons why someone might need to get rental cars. Going on a trip to another state or city is some of the most common reasons why people choose rental cars. It is better to drive around the city and explore yourself.
But with rental cars comes rental car insurance. Almost every state in the US (except one or two) requires drivers to have auto insurance. Driving a car, rental or personal vehicle without the proper auto insurance policy will not only result in legal action, but if you get in a car accident, it would lead to a mountain of financial problems as well.
Let’s look at what happens if you damage a rental car without insurance and everything else related to it.
Rental Car Damage Without Insurance? Not Possible!
Driving a rental car is just like driving a normal, personal car (minus the bad smell some rental cars have). This means that to legally and safely drive a car, you are required to have a car insurance policy.
Depending on the state you live in, the auto insurance policies required might vary. For example, almost every state requires you to have liability insurance to drive any car, personal or rental.
Liability insurance ensures that if you crash into someone’s car and it is your fault, your policy will pay for the damages and medical treatments of the other driver. Liability insurance is very likely to be the most expensive car insurance policy.
Some states also mandate drivers to have a personal injury protection plan which can be claimed to cover the cost of medical treatments for you. You can claim this policy irrespective of whose fault the accident was (that’s why these states are called no-fault states). 12 states require drivers to have a personal injury protection plan. For instance, Texas law requires a minimum PIP coverage of $2,500. Trent from TK Injury Lawyers says: “Even if you receive a settlement from the insurance company after a car accident, you should see your options with an experienced car accident lawyer before accepting it.
Finally, some states require you to carry an uninsured motorist coverage plan. As the name suggests, this policy can be claimed if you get in a road accident with an uninsured driver. It can also be claimed if the driver at-fault is underinsured.
Now that we have covered all the mandatory policies, let’s come to the core question; what happens if you damage a rental car without an insurance policy?
Insurance Requirement
If you damage a rental car and you do not have car insurance, you are liable to pay for the repairs. No matter what the cost is, you are legally bound to pay the charges. The repair cost could go as high as $20,000, sometimes over this amount as well. Many people do not have that kind of money ready for car repairs. What can be done then?
This would lead to you getting sued and no matter how you will have to pay the amount. As you can guess, if a person with no insurance drives and damages a rental car, not only the driver but the rental company as well.
So to prevent a situation like this, car rental companies require people to have all the mandatory auto insurance policies along with two additional car insurance policies; collision damage waiver and comprehensive insurance.
A collision damage waiver is claimed to cover the cost of car repairs when the accident was your fault. So you can understand why car rental companies require you to have a collision damage waiver. No matter what the damages are, if it is due to a collision accident, your collision insurance will cover it.
Comprehensive insurance may or may not be required by the rental company in some cases. This policy is also called parked car insurance and it covers the cost of repairs for damages when the car is parked. Damages due to natural causes such as hailstorms, earthquakes, floods, etc. Damages due to projectile, theft, vandalism, etc. are also covered in this policy.
So you need to have all the mandatory car insurance policies along with the optional collision damage waiver and comprehensive insurance to rent a car. But many people who do not own a car (and auto insurance policies) also require to rent a car now and then. So what about them?
Rental Car Insurance Policies
For people who do not have personal car insurance can go for rental car insurance policies. These policies have all the mandatory coverages included as required by the state laws with the minimum coverage limit as required by the state.
This means that if the cost of the accident is beyond the coverage limit, you’ll be required to pay the remaining amount from your pocket. For example, if you live in Indiana and decide to get rental car insurance, the coverage limit would be just what the state’s minimum requirement is.
Let’s say you get in a car accident in Indiana and the cost of medical treatments comes out to be $35,000, you’ll have to pay $10,000 from your pocket since the minimum coverage limit for bodily injury in Indiana is $25,000.
If you already own mandatory car insurance policies as well as collision and comprehensive policies, you do not need to get rental car insurance. Your insurance policies (liability insurance, collision damage waiver, etc) will cover the rental car damages. So choose great car insurance at affordable rates to avoid paying from your pocket.
Keep your search specific to your state to get the most accurate rates. For example, if you are a resident of Indiana, search for the best and most affordable Indiana auto insurance quotes to find the best rates and best coverages.
While damaging a rental car without car insurance will require you to pay for the total cost of repairs from your pocket. But this is rarely the case as no car rental company will give you the car if you either don’t have proper car insurance policies or rental car insurance.
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What would happen if you get in a car accident in a rental car with no auto insurance? Here’s all the things you need to know, from the policies to the price.
