In the unfortunate event that a person ends up in an accident in a rental car while on a personal holiday, insurance will most likely pay for any medical expenses incurred. However, which insurance company is responsible will depend on who caused the crash and the types of insurance the various parties have.
Sources of Available Insurance in a Rental Car Crash
Several possible sources of insurance may be available to pay medical bills after an accident. Knowing which insurance may apply requires an understanding of how different policies work together in a given situation.
Liability Insurance From the Rental Car Company
When you rent a vehicle in Louisiana, state law requires a rental car contract to provide the renter with liability insurance that meets the minimum liability limits required for all drivers. The minimum required auto liability coverage in Louisiana is:
- $15,000 for bodily injury to one person
- $30,000 for bodily injury to all persons
- $25,000 for all property damage
The insurance provided by the rental car contract applies only to other persons injured and property damaged by the rental car driver. There may be coverage for passengers in the rental car if they are not members of the renter’s immediate family.
If the rental car driver has a personal auto liability policy, the rental car company’s insurance will provide coverage secondary to the renter’s own insurance and will only apply if the personal auto insurance does not cover all of the damage.
Supplemental Liability Insurance (SLI)
In addition to the minimum liability coverage, rental car companies are obligated to provide, they will also offer car renters the opportunity to purchase additional coverage. This is the coverage that many people do not purchase if they have adequate personal auto insurance. It applies only after the minimum liability limits provided in the rental contract (which apply only after the renter’s personal auto policy).
Rental Car Insurance Provided by a Credit Card Company
A number of credit card companies offer a limited amount of first-party coverage when a car is rented using a particular credit card. The coverage offered by credit card companies typically applies only to damage done to the rental vehicle. But some companies may also offer a limited amount of accidental injury coverage for the driver and passengers.
The Rental Car Driver’s Personal Auto Insurance Policy
A personal auto insurance policy will usually provide the same coverage to an insured when driving a rental car as is provided when driving a personal car. However, personal insurance policies issued in the United States only apply while driving in the US and possibly Canada.
If the personal policy has collision and/or comprehensive coverage, it will apply to the rental vehicle. A liability-only policy provides no coverage for damage to a rental vehicle. A renter would need to have purchased a collision damage waiver from the rental car company or used a credit card that provided coverage for the rented auto.
Personal auto liability coverage will often be the primary coverage to apply in a rental car accident. While drivers are required to have personal injury coverage for injuries caused to others, there is no requirement for them to carry coverage for their own injuries.
Medical payments (med pay) coverage is an optional coverage that can be purchased to cover the medical and funeral expenses of a driver and passengers. Med pay coverage applies without regard to fault and pays actual medical expenses with a maximum limit of $5,000 per person.
The Auto Insurance of an At-Fault Motorist
When another motorist is at fault for an accident involving a rental car, the other motorist’s liability auto insurance will have the primary responsibility to pay for the medical bills and property damage – up to the limits of the other driver’s policy.
But getting the money from the other carrier may take a while and payment for medical expenses may have to come from first-party coverage – like med pay or personal health insurance – in the meantime.
If the at-fault driver does not have insurance or does not have enough insurance to pay for all of the medical costs and property damage, the personal auto policy of the rental car driver may be able to pay the difference if the renter has purchased uninsured/underinsured motorist (UM) coverage.
UM coverage is not required in Louisiana but it is strongly recommended. Carriers must offer it and buyers must opt out of purchasing it in writing. If optional car insurance coverage such as med pay and UM is not purchased, the injured driver and passengers of a rental car may be left with their own medical insurance to cover the cost of medical bills.
The Personal Health Insurance of an Injured Party
Using personal health insurance to cover the cost of medical bills after a rental car accident may be the fastest way to get medical expenses paid if other first-party medical coverage is not available.
Insurance companies that provide first-party medical benefits when someone else is at fault for an accident have the right in most cases to recover the benefits paid once a settlement is reached with the at-fault party’s insurance company.
The providers of unpaid medical services also have a right to collect the reasonable cost of the services provided from any settlement with an injured person. Written notice of the outstanding medical bills must be provided to the insurance company before the settlement proceeds are distributed to the injured party. An insurance company must comply with the notice or become directly liable to those who filed the lien.
Payment of Medical Bills after a Rental Car Accident
When someone has been injured in a rental car crash, it’s important to identify all possible sources for payment of medical bills and determine which are applicable and in what order of priority insurance coverage will apply.
Working with a personal injury attorney who understands how different insurance policies work together and the tactics insurance companies may use to try and avoid responsibility can help expedite payments and make sure an injured party receives the maximum available benefit for medical expenses.