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What Happens if a Rental Car is in an Accident if the Driver is Someone that is Insured but not on the Rental Contract?
February 9, 2022
The Answer is Simple, But Likely Not What You Want to Read
What are the consequences of a rental car that is in an accident while driven by someone that is insured, but not an authorized driver on the rental contract?
It’s quite simple: The rental car contract, and insurance coverages provided by that contract may be VOIDED.
What then, are the consequences of a voided rental contract? Benefits that are normally extended or even purchased with the rental car contract can be terminated. It also creates the potential for the unauthorized driver’s insurance policy to deny physical damage coverage for the rented vehicle.
Rental Car Contract:
The rental car contract is between the person(s) signing the contract and the rental car company. It should come as no surprise, that the contract may be breached if the contract signer allows the use of the rental vehicle, counter to the contract provisions.
The terms “authorized” or “unauthorized” driver are liberally used in any rental car agreement.
As an example, the Avis Rental Car Contract
shown below, is clear that an unauthorized driver terminates the contract.
If so, what are the consequences?:
According to the Avis contract, the consequences include:
- Voiding of all Liability Protection
- Voiding of all Optional Services including
- Additional Liability Insurance, Personal Accident Insurance, Personal Effect Protection.
- Makes the Signer liable for all Penalties, Fines, Forfeitures, Liens etc, etc.
This type of contractual intent or clause is not unique to Avis.
- The Hertz contract can be seen here
- The Budget contract can be seen here
- The Alamo contract can be seen here
If another driver has insurance, one should not assume that their insurance will extend to the rental car that you are renting. The sample ISO Personal Auto policy extends to rental cars specifically if the vehicle in question is a “non-owned auto” of the insured. Sample ISO Auto policy exclusion language can be seen below:
If the driver is otherwise insured and the rental vehicle is being used without contractual entitlement, there may be conflicts regarding which policy (if any) is going to respond.
How the company will respond in this instance will depend on the state in which the accident occurred, the state in which personal auto policy was written, the insurance company, and their specific contract wording.
When renting a car, it is always in the renter's best interest to make sure that all drivers are “authorized” by the rental car company and also otherwise insured.
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This article was originally published at Quora.com.
To see Jeff's Quora.com profile click here.
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“Ask Jeff" is a weekly post made on the RyanAgency.com Blog.
Submit an insurance-related question to “Ask Jeff”.
-------------------------------
This article may have been originally published at Quora.com.
To see Jeff's Quora.com profile click here.
Factors You Can’t Easily Control These factors are built into your profile, but still play a major role: Your location: Claim trends, traffic, and weather patterns where you principally drive. Your age and driving experience: Especially for younger drivers. Other drivers in your household: Their age and driving history. The vehicle you own: Unique to the Year, Make, Model, and Sub-model’s damageability and cost of parts/labor. These factors significantly influence price differences, but they don’t tell the whole story. Factors You Can Control This is where habits and wise decisions can make a real difference: Your driving habits: Minimizing tickets and accidents can have a direct impact. Your coverage choices: Liability limits, deductibles, and optional coverages can vary widely. Your insurance consistency: Avoiding lapses in coverage. Your annual mileage: How much and how often you drive. Discount opportunities: Bundling, pay-in-full, NYS defensive driving course. Your Insurance Score (Yes—You Can Influence It) Insurance companies use a credit-based insurance score as part of their rating process. While it’s based on financial behaviors, it is not permanent—and it can be improved over time. Simple habits like: Paying bills on time Reducing outstanding debt Avoiding excessive credit inquiries… can positively impact your score—and in turn, your insurance rates. Your insurance score is under your control and a worthy mid to long-term project in and of itself. For more information on what you can do to positively influence your score, see: Great 8 Tip #8 - What's Credit Got to Do with Insurance? How Can I Improve My Auto Insurance Score Why Comparing Rates Doesn’t Work When someone says, “I only pay…” , the uniqueness of their fingerprint is missing. What are their: Deductibles Driving history Insurance score Household profile Coverage limits: what they may be giving up in terms of protection. Price without context can be misleading and discouraging.
Part 7 – Designing a Value-Driven Insurance Plan
Part 6 – Advice, Advocacy, and Answers
Part 5 – Can Your Company Deliver?
Part 4 – Custom Coverage = Real Protection
Part 3: Coverage Limits - "The Ceiling You Don't Want to Collapse"
Part 2 – The Risks of Chasing Cheap
Part 1: What Are You Really Paying For?
Insurance fraud is a significant problem, exceeding $300 billion annually, with the Property and Casualty sector contributing nearly $50 billion to that total.
Living in New York, you might have a stack of insurance documents—auto, homeowners, health, or life insurance policies—filed away somewhere. But how long should you keep those documents, and specifically, what papers should you hold on to?
