Rental Car Liability – You Might Surprise What You’re Standing For – Jalopnik

In one of Jeff Foxworthy’s stand-up routines, he says that when a car rental guy asks him if he wants the extra insurance, “I say, ‘Yes, I would. Because you’ve got a Ford Fiesta that’s about to see more airtime than a skateboard at the X Games.'”

While we don’t encourage you to drive like Foxworthy, it’s always a good idea to make sure your rental car is insured. In fact, it is a necessity. Some of you are probably thinking, “I don’t need the insurance. I’ll just be careful and not get into an accident.” Even if you could guarantee that you would never cause an accident, what about hail damage? What if someone destroys or steals the rental car? What if someone bumps into it with a full shopping cart? Can you guarantee that these things won’t happen?

“But none of that would be my fault,” you might think. Do you think the rental company cares who is to blame? Then read your rental agreement carefully again. You are liable for damage to the vehicle during the rental period, regardless of fault, even if there is force majeure. (Remember: God doesn’t carry a state farm.)

But it is not just the damage for which you may be liable. If the rental vehicle requires repairs, the rental company may charge you a “loss of use” fee for each day the vehicle is in the store. And hopefully the car will be returned to the correct location once it is repaired, as there is also a ‘return to the wrong location’ fee. So whether it’s your own insurance, the rental company’s insurance or your credit card’s policy, make sure the car is covered.

It may seem strange that a car rental company holds you responsible for, for example, hail damage, over which you have virtually no control. Yet that is exactly what happened to 23-year-old Faith Marie Spillers this year. Her husband had just completed basic training in Oklahoma, so she decided to fly there to attend his graduation and then rent a Toyota Corolla from Enterprise. While she was there, a hailstorm broke out, significantly damaging the car.

The day after she returned the Corolla, Enterprise charged her a $1,000 deductible. Not long after, she says, it sent her a bill for $10,000. Why was she charged for something that was clearly not her fault? Enterprise said Engine1“Customers sometimes mistakenly believe that they are not responsible if they did not personally cause or witness damage. This is one of the most common misconceptions about rental car damage. In fact, customers are financially responsible for damage incurred during a rental transaction, regardless of fault or negligence, just as if they owned the rental car. This is stated in our rental contract.”

What could Spillers have done? First, she could have opted for Enterprise’s extra coverage when she rented the car. Understandably, she felt that the company was already rewarding her with the significant young renter allowance (rental car companies like to add extra fees), and that she couldn’t afford to spend another $40 to $50 a day. But it would have cost her a lot less in the long run. These types of incidents can happen to anyone. That’s why it’s important to make sure your rental car is covered.

What if you are hit by a drunk driver? The rental company isn’t going to hold you responsible for that, right? If you’ve read this far and are still asking questions like this, then you haven’t been paying attention. Yes, it is entirely possible that you will be blamed if your rental car is hit by another driver.

In December 2022, Joe Vandetta and his family made the same holy pilgrimage that many American families do in the winter: they went to Florida. At one point, the family headed to Key West in a large SUV rented from Budget. After spending the day there, they returned to their hotel, 45 miles away in Marathon Key. We talked about weather and other hazards that can cause damage to a rental car. But the Vandettas didn’t count on one additional danger in the southernmost state of the US: Florida Man.

On the family’s way back to their hotel, another driver crashed into their SUV. No one was seriously injured, but the other driver left the scene. Shortly after the police showed up, however, a man arrived who was clearly under the influence. It was the driver who crashed into his car. He admitted to causing the crash.

The family found their way back to the hotel and eventually back home to Ohio, but received an unpleasant surprise about a month later. It was a bill for $22,158, the value of the car, some fees and the proceeds from the salvage sale. Vandetta convinced Budget to apply for the drunk driver’s insurance for that amount. But soon he would receive another bill, this time for ‘loss of use’ and ‘administration costs’.

Damage to your rental car isn’t the only thing you could be held liable for after you return it. The Vandettas learned this the hard way after returning from their vacation in Florida. Yes, they got Budget to change their mind about pursuing them for the value of the wrecked rental SUV, but soon after, they got another letter from Budget, who charged their credit card another $2,370. Budget said it was for “loss of use” and “administrative costs.” A closer look at the bill revealed that there had actually been a daily rental charge for a month after the collision and a $300 “one-way drop-off” fee (the car was returned to Miami instead of Fort Lauderdale, where they picked it up).

The Vandettas tried to talk to Budget again, but this time the rental company remained firm. It would not refund the costs. So Joe Vandetta contacted a consumer group, Consumer rescuewho contacted Budget’s parent company on his behalf. Shortly thereafter, Budget refunded the full amount of $2,370.

In the end, the Vandettas turned out fine. But the fact is that car rental companies include provisions in their contracts that put you on the hook for things like “loss of use.” You may also be charged high fees if the car is returned to the wrong location. The good news is that ‘loss of use’ is covered by the insurance you can take out with the rental company. It may also be covered by your own insurance or your credit card. But you might want to check just to be sure.

There is no doubt that insurance coverage is a must. But is rental company insurance your only option? Actually you have several options.

For starters, the insurance you take out for your own vehicle can cover rental cars. But you’ll want to look at the fine print. Is the damage to your rental car covered or only the damage you cause (liability)? Does it include things like “loss of use”? Is there a deductible? If so how much is it? If you are unsure about any of these points, call your insurance agent. You can always add passengers to your insurance to cover these items. If you don’t have car insurance because you don’t own a car, there are third-party insurance companies that specifically cover rental cars.

Another option is your credit card. Some credit cards cover damage to rental cars, including “loss of use.” Check your credit card agreement in detail before relying on it for coverage.

Even the rental company’s insurance offers multiple choices. The “Collision Damage/Loss Damage Waiver” covers damage to the rental car (although a deductible may apply). Additional liability insurance covers damage you cause to the property or persons of others. Personal accident insurance also covers property damage and medical bills for you and your passengers, but may overlap with other policies, so you may not need it. Personal property coverage covers the cost of belongings stolen from the rental car, which may also be covered under your homeowner’s or renter’s policy.

You don’t have to choose all of these and you may decide that you don’t need some of them. But somehow you should at least be covered for collision/loss damage and liability.

If you take anything away from the article, it should be this: make sure your rental is covered for any damage, regardless of fault. That means you need comprehensive coverage and liability. It’s a good idea to make sure costs such as ‘loss of use’ are also covered. To do that, you’ll need to check the fine print of whatever source of coverage you choose, whether it’s the rental company’s insurance, your personal insurance, third party liability insurance, or your credit card.

Also make sure you are not blamed for pre-existing damage. Inspect the car thoroughly for damage before removing it from the rental lot. Take a photo of any dents or scratches and point them out to the rental agent so they can be documented. You will also want to inspect the car when you return it. And of course, fill the tank of your rental car, because charging customers a huge price per gallon is one of the most common car rental scams.

If you have an accident, get caught in a hailstorm, or something else happens that damages the rental car, take pictures, get the police report, and get everyone’s insurance information. If the car is broken down and needs to be towed, make sure it is towed to the right location so you don’t have to pay the one-way fee. Don’t make assumptions about where the tow driver will take it.

Making sure you have the right coverage for your rental car may seem difficult, especially if you have to pay a little extra for it. But compare that to the cost and aggravation of paying for damages out of your own pocket. Insurance is one area you don’t want to skimp on.