carrentalinsider.com

If you had an accident recently and are now looking on the Internet for “what to do”, click this link here.

 

Since you have already had an accident and reported the incident to your rental car company, there are a few things that you still need to do, or maybe not.

1. Report the accident to your insurance company.  While this may seem redundant if you have car rental insurance or some other add on policy, there are very compelling reasons to report it.

Your insurance company is your advocate, your attorney. In a sense you have already paid them a retainer to help you if you are in an accident.  Get your money’s worth.  If it’s a small fender bender, less than 500 dollars damage, it’s likely that there is not going to be any sort of issue.  Some people may question the wisdom of reporting a car accident to your insurance company even though you have already paid for/have coverage to pay for a car accident outside your insurance such as credit card or travel insurance.  I, personally, have learned the hard way that if you are at fault, there are people out there that will take advantage of your situation.

Depending on state law, a particular order of payment may apply.  in my state, my personal insurance is primary, no matter what.  So if I get into an accident with my rental car in state, my insurance carrier must pay for all damages, minus deductible, before any other coverage will take place.  *note:  This is ANOTHER good reason why loss damage waiver is better than loss damage insurance.  It’s technically “not a claim”, so they are not required by law to wait for the primary insurer to pay off first.

 

2. The version of the rental agreement that applies to you is the version handed to you at the time of rental.

To use an over the top example, let’s say one rental agreement said nothing about driving on a particular highway.  On January 1, they changed the rental agreement forbidding travel on that highway.  You rent a car on January 15th and drive on that highway, getting into an accident.  The rental car company, credit card Company, and your insurance carrier will all refuse to pay for the accident because you violated the rental agreement.  But let’s say the agency forgot to throw out the old brochures and gave you a rental agreement that did not speak to travel on that highway.  You are bound to THAT agreement and the rental agency will have a hard time convincing any judge or jury that you violated the car rental agreement.  Once you are legally found to have not violated the rental agreement, the insurance company cannot refuse your claim on that basis.  So keep your paperwork and treat it like tax paperwork.   Keep it for a few years, or at least until all claims have been satisfied.

 

3. Most confusing and muddling part of the whole accident in a rental car is the “loss of use” clause.  This is where the car rental company tries to charge you for market rates for the time the car is unusable to the rental car company.  This is in the rental agreement, it’s a legal cost, and it may or may not be covered by the myriad of coverage you possess.  However, there is some hope.

In order for a car rental company to obtain loss of use payment in many states, the rental company must prove that the class of car you damaged sold out during the period starting with when you returned the damaged car until that car is back in service and available for rent.  In other words, the burden of proof is on the rental company to prove that they needed that car and had it been in service it would have earned income for the business.  Let me tell you, this is virtually impossible to prove.  Rental car companies have thousands of cars.  It’s extremely rare to rent a car out 100% ever.

The rental car will try and do a percentage calculation.  They will claim that that particular car class was rented 80% capacity during that timeframe, so they will charge you 80% of the total costs during that time.  Want to hear some good news?  When I reversed my rental car into a wall before I was with the rental company, I submitted my personal insurance (by law as primary) and the car rental insurance benefit of my American Express card as secondary.  Both American Express and Progressive insurance straight out laughed when they saw the “loss of use” charge and said “do not worry, were not paying that.  Let them prove it.”

 

Before you pony up the loss of use, consider your options.  This is yet ANOTHER reason why you pay your car insurance.  They don’t flinch when it comes to the letter of the law and what they can prove.