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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.
Have additional insurance questions? We LOVE to help. Please feel welcome to call us at 607-324-7500
This article was originally published at Quora.com.
To see Jeff's Quora.com profile click here.
-------------------------------
“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.
The year 1962 was marked by historic events—from the Cuban Missile Crisis to the passing of Marilyn Monroe. But while the world focused on these headlines, Lee A. Ryan was working alongside his brothers on my grandparents' farm when an unexpected opportunity arose—an invitation to join the insurance business. With no prior experience, no clients, and limited resources, my dad took a leap of faith and partnered with Nationwide Insurance to start an agency from scratch. Operating out of his home on Karr Valley Road in Almond, NY, he built his business one relationship at a time (some of whom are still clients!), laying the foundation for what would become a lasting legacy.
“Am I covered if I drive someone else’s car?” Or, “Am I covered if someone else drives mine?”
Many don’t realize that the insurance industry is one of the country's most regulated business segments, especially in New York State. The New York State Department of Financial Services (NYS DFS) wields significant control over the insurance business and has a stated goal of protecting consumers.
Most property insurance companies offer Actual Cash Value or Replacement Cost settlement options. Typically, insurance companies will require that you insure the property to the settlement value you choose. If you select Actual Cash Value, the amount you may be required to insure the property for will be less than the corresponding Replacement Value.
In that spirit, the Ryan Agency is sponsoring a Stearns BBQ Dinner pickup at our office on 57 Broadway Mall in Hornell on September 12th from 3:00 PM to 4:30 PM.
Today, an individual’s credit history can play a more significant role than any one of those traditional factors. Good Credit Scores lead to a Positive Insurance score. A good Insurance Score greatly influences what someone will pay to insure their vehicles.
Insurance companies offer various discounts for which their policyholders may qualify.
Great Eight number Six (6) suggests taking a look at removing Comprehensive and Collision on Older Vehicles.
By reducing the number of claims in your insurance history, you can significantly affect your rates in the future.
Sometimes, this concept meets with resistance from policyholders. The thought of paying more in the event of a claim is off-putting to some. Even if that means I pay more for my insurance.
