If you’ve been injured in a car accident involving a rental car, you may be wondering how and from whom you can recover your damages. More specifically, you may be wondering whether the rental car company can be held liable for the accident. It's rare -- but not unheard of -- for a rental car company to be on the legal hook after a car accident. Let's take a closer look at the general rule (of no liability on the part of the rental agency) and some exceptions.
In most situations, you cannot sue the rental car company after a car accident. Liability in rental car accidents works just like it does in regular car accidents, so if the person driving the rental car is found to be at fault, he or she will be liable for the resulting damages (that includes the medical bills, lost income, and pain and suffering of anyone injured in the accident, plus the cost to repair or replace any damaged vehicles). If you caused the car accident, that means your personal car insurance will kick in and cover the accident (more on insurance in the next section).
(As an aside, the same goes for tickets: If you get a parking ticket or are assessed a traffic violations while driving a rental car, you are responsible for paying the fine, not the rental car company).
If you're hit by someone driving a rental car, just because you can’t sue the rental company, that doesn't mean you don't have other options for getting compensation for your losses.
A number of different types of insurance coverage could come into play after a rental car accident. For example, the at-fault driver's personal car insurance usually extends to an accident involving a rental car. Additionally, insurance sold by the rental car company may provide liability coverage, minimal though it may be. Similarly, if a rental car is paid for with a credit card, the card company probably offers at least collision coverage (which will cover your vehicle damage, but not your medical costs). Finally, if the responsible party does not have any car insurance (personal or through the rental car company), you may have to resort to using your own insurance (namely, your uninsured or underinsured motorist coverage) to recover damages resulting from the accident.
Learn more about the different coverage possibilities and get tips for making a claim in our companion article Rental Cars and Insurance.
While most rental car accident cases will come down to driver liability, there are some rare exceptions where the rental car company can be held liable.
For example, you might be able to sue the rental car company if the accident was caused by -- or the effects of the accident were made worse by -- a dangerous vehicle defect that the rental car company knew about but failed to fix. In other words, the rental car company’s negligence in maintaining and/or repairing the vehicle can serve as a basis for liability, but you'll need to establish a causal link between the issue with the vehicle and the accident.
Also, if the rental car company was negligent in renting out the car, you might be able to sue. For instance, if the company failed to verify driver's license information and rented a vehicle to a driver whose license was revoked for multiple DUIs, the rental car company might be held liable.
