California - Liability insurance on Rental Car in California

I rented a car at LAX at the weekend intending to use my own liability insurance. However I did not take a copy of my own policy with me.

The counter agent insisted that it would be illegal for me to drive the car unless I bought the their liability insurance since I would have no proof of insurance if I was stopped by police.

Is this correct or was I scammed ?

I know that the rental car companies do not provide any liability insurance in California but even after I bought their insurance I still had no explicit proof of insurance only an unclear entry on the rental agreement.

I noticed that their was 'a certificate of self insurance' in the glove box.

In the past I have rented without carrying my own insurance policy - was that not allowed?

Sounds shady to me. I'm an insurance agent in California. Credit card should have sufficed. You shouldn't need to show proof of insurance at the rental counter.

I think you were scammed. it is my understanding that Rental car companies in California are not allowed to require proof of insurance. I would follow up with a complaint to the rental company you were dealing with requesting a reimbursement of what you were charged, and put a CC in to the California Attorney General, they sued Fox rent a car over similar issues in the past. What was the company that you were dealing with?

I rented a car at LAX at the weekend intending to use my own liability insurance. However I did not take a copy of my own policy with me.

The counter agent insisted that it would be illegal for me to drive the car unless I bought the their liability insurance since I would have no proof of insurance if I was stopped by police.

Is this correct or was I scammed ?

I know that the rental car companies do not provide any liability insurance in California but even after I bought their insurance I still had no explicit proof of insurance only an unclear entry on the rental agreement.

I noticed that their was 'a certificate of self insurance' in the glove box.

In the past I have rented without carrying my own insurance policy - was that not allowed?

Was it a major rental company? Some small companies would not rent you without a proof of liability. I experienced this in San Diego with Midway Car Rental.

He never actually asked to see my proof of insurance.

He just said that it would be illegal to drive the car if I didn't have it. I could have just lied and said that I had but that didn't seem a good idea if he was actually correct.

Well it is my understanding from what i have read of California law that it is illegal to require proof of insurance, whether insinuating that if you don't have the proof on you that you may be breaking the law, and using that to get you to buy insurance is illegal is questionable, my guess from what i read is that what he did is probably illegal. What was the company?

He never actually asked to see my proof of insurance.

He just said that it would be illegal to drive the car if I didn't have it. I could have just lied and said that I had but that didn't seem a good idea if he was actually correct.

This was with Advantage

This was with Advantage
I have rented with them at LAX, and haven't experienced that before, My guess is that an overly aggressive agent trying to meet his quotas through questionable practices. Like I said above I would follow up with a complaint and CC the CA AG, that should get there attention.

I have sent a complaint to Advantage and will see how they respond.

It is against California State law for them to rent a car to you unless they provide minimum liability insurance. Most car rental places self insure state mandated minimum liability.

IMO Scam for sure on the part of the counter person. I'm sure there must be some kind of commission or quota for up selling additional coverage involved.

Agree it was a scam. They can post a bond instead of having the insurance, but the effect as far as the renter is concerned is the same.

Interesting thread.

What happens in California if you are pulled over by a policeman/highway patrol in a rental car for an infraction or an accident and you are asked for registration and proof of insurance?

Your contract should prove ownership (the rental agency) and if you took out insurance, it will show on the contract. But if you declined, how do you meet the state's requirement of being able to show proof of insurance?

Interesting thread.

What happens in California if you are pulled over by a policeman/highway patrol in a rental car for an infraction or an accident and you are asked for registration and proof of insurance?

Your contract should prove ownership (the rental agency) and if you took out insurance, it will show on the contract. But if you declined, how do you meet the state's requirement of being able to show proof of insurance?

You establish that it's a rental car by showing your contract and that's all they need, even if the "additional liability" is denied.

Just finished my LAX 11 night stint..

Picked up rental vehicle and the guy at the counter says.. I should buy additional insurance for peace of mind..

I have 2 vehicles with rental vehicle insurance on it.. and I've got 3 ccs with extra protection.. These guys must be on commission or something.. because the counter agent was relentless.. almost made me question whether I had appropriate insurance or not..

Picked up rental vehicle and the guy at the counter says.. I should buy additional insurance for peace of mind..

I have 2 vehicles with rental vehicle insurance on it.. and I've got 3 ccs with extra protection..

I fully appreciate your position; however, others may be differently situated.

In California, rental car companies provide only the minimum legally required liability insurance, which is 15/30/5. That translates to $15,000 for bodily injury, with a maximum of $30,000 per accident with multiple victims, and $5,000 in property damage. That is grossly inadequate.

A renter who has no primary or secondary auto insurance who gets into an accident where the damages exceed the rental company provided liability coverage may end up suing the rental company for not properly warning him or her about the need to be properly insured.

I fully appreciate your position; however, others may be differently situated.

In California, rental car companies provide only the minimum legally required liability insurance, which is 15/30/5. That translates to $15,000 for bodily injury, with a maximum of $30,000 per accident with multiple victims, and $5,000 in property damage. That is grossly inadequate.

A renter who has no primary or secondary auto insurance who gets into an accident where the damages exceed the rental company provided liability coverage may end up suing the rental company for not properly warning him or her about the need to be properly insured.

I agree with your assessment..

My brother got into an accident where the person who rear ended him had inadequate insurance.. and then the rental car company called him up asking him to pay the additional $4,000 that wasn't covered by the perpertrators insurance..

This happened just leaving LAX..

So yes, it was a bit of a hassle for my brother, even though he was not at fault.. but why try to pin it on a renter who's not at fault?.. go after the perpetrator..

My brother got into an accident where the person who rear ended him had inadequate insurance.. and then the rental car company called him up asking him to pay the additional $4,000 that wasn't covered by the perpertrators insurance..

Higher liability limits would not have helped your brother in this case. Such damage is covered by collision insurance and loss damage waiver. Liability insurance covers damage to third parties when the renter is at fault.

I hear what the last two posters are saying -- but let me ask you this question: just take the amount quoted by the insurance company and multiply it by 365 to get an annual rate. The amount is absurdly high, right? If you're really worried about this, some credit card companies will sell you either liability or collision rental car coverage (or both) at a ridiculous, but still significantly lower, price.

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If you own a car and have insurance, your carrier will most likely cover you up to the policy limits when you drive a rental. In addition, most credit card issuers offer free secondary liability, collision and comprehensive insurance when you use one of their gold or platinum cards to pay for your rental car.

Higher liability limits would not have helped your brother in this case. Such damage is covered by collision insurance and loss damage waiver. Liability insurance covers damage to third parties when the renter is at fault.

Higher liability limits would have helped..

but the person who rear ended my brother should have taken more out was my point..

Higher liability limits would have helped..

but the person who rear ended my brother should have taken more out was my point..

Was the person who rear ended your brother driving a rental?

Was the person who rear ended your brother driving a rental?

Not sure.. but they did have insurance..

although it was $4K short of covering the necessary repairs on the rear end..

OK, I think I got it; higher liability coverage for the person at fault, not your brother who was driving a rental car.

Your brother would have been protected had he purchased CDW or LDW, which is outrageously expensive (and which I always decline because my automobile insurance covers me when I drive rentals and I always pay for car rentals a credit card which offers secondary insurance).

The OP was upset that his rental company pressured him to buy liability insurance. That type of extra protection would not have helped your brother in the situation that you described had he bought it when he rented the car. Liability insurance covers at fault drivers against claims by third parties.

OK, I think I got it; higher liability coverage for the person at fault, not your brother who was driving a rental car.

Your brother would have been protected had he purchased CDW or LDW, which is outrageously expensive (and which I always decline because my automobile insurance covers me when I drive rentals and I always pay for car rentals a credit card which offers secondary insurance).

The OP was upset that his rental company pressured him to buy liability insurance. That type of extra protection would not have helped your brother in the situation that you described had he bought it when he rented the car. Liability insurance covers at fault drivers against claims by third parties.

Now he avoids Alamo unfortunately.. because Alamo called him a few times saying that he should cover their shortfall because the guy at fault didn't have enough insurance.:rolleyes:

Goes to show, you can be really prepared.. and Murphy's Law seems to get you every time..

Now he avoids Alamo unfortunately.. because Alamo called him a few times saying that he should cover their shortfall because the guy at fault didn't have enough insurance.


Why do you think it should be Alamo's problem? It's your brother's problem, he brought back the damaged car. All Alamo wants is to fund its repair.

Why do you think it should be Alamo's problem? It's your brother's problem, he brought back the damaged car. All Alamo wants is to fund its repair.

Actually its the guy who rear ended my brother's problem.. my brother did not cause the accident..

Its only because the guy who rear ended my brother did not have enough insurance, that Alamo approached my brother.. Alamo should be going after the guy who rear ended my brother..

Actually its the guy who rear ended my brother's problem.. my brother did not cause the accident..

Its only because the guy who rear ended my brother did not have enough insurance, that Alamo approached my brother.. Alamo should be going after the guy who rear ended my brother..

Check the rental contract. It's your brother's cost to fix the car; he's welcome to pursue the guy who caused the accident, but Alamo is right to bill the renter.

Check the rental contract. It's your brother's cost to fix the car; he's welcome to pursue the guy who caused the accident, but Alamo is right to bill the renter.

My brother has insurance to cover it with the renter.. so my guess is that Alamo's deal is then with their insurance..

My brother has insurance to cover it with the renter.. so my guess is that Alamo's deal is then with their insurance..

No, you still misunderstand. Alamo's "deal" is between him & your brother. That's it.

The rental contract says your brother reimburses Alamo for any damage.
Alamo is billing your brother for the damage.
How your brother comes up with it is up to him -- he can use his insurance, or pay himself.

No, you still misunderstand. Alamo's "deal" is between him & your brother. That's it.

The rental contract says your brother reimburses Alamo for any damage.
Alamo is billing your brother for the damage.
How your brother comes up with it is up to him -- he can use his insurance, or pay himself.

I'll talk to my brother about it I guess..

So interesting..

You're saying even if you buy insurance from the rental car company.. its' not covered.. and you have to deal with the insurance like its third party..:eek: Not only is the cost approximately $30 per day.. but you have to deal with the insurance company seperately.. wow..

You're saying even if you buy insurance from the rental car company.. its' not covered.. and you have to deal with the insurance like its third party..:eek:


"What's covered" depends on what insurance he bought.
It is very possible that the insurance he purchased does not cover the type of claim being made.

You're saying even if you buy insurance from the rental car company.. its' not covered.. and you have to deal with the insurance like its third party..:eek: Not only is the cost approximately $30 per day.. but you have to deal with the insurance company seperately.. wow..

If your brother bought liability insurance from Alamo, that will only protect him for losses sustained by third parties if he were at fault in an accident.

LDW (Loss Damage Waiver) or CDW (Collision Damage Waiver) would have protected your brother in the situation that you described; i,e., when someone other than your brother was at fault and caused the damage, when the rental agreement states that your brother was obligated to return an undamaged car to Alamo. Had your brother purchased such coverage, that would have been the end of it; no hassle, no red tape, no nothing.

If your brother, like me, relies on his own auto insurance policy to protect him in such situations, he should turn over Alamo's demand to his insurance company. The same applies if he has insurance through a credit card issuer. Time is of the essence. Most insurance carriers require prompt notification in order to pay such claims.

"What's covered" depends on what insurance he bought.
It is very possible that the insurance he purchased does not cover the type of claim being made.

If your brother bought liability insurance from Alamo, that will only protect him for losses sustained by third parties if he were at fault in an accident.

LDW (Loss Damage Waiver) or CDW (Collision Damage Waiver) would have protected your brother in the situation that you described; i,e., when someone other than your brother was at fault and caused the damage, when the rental agreement states that your brother was obligated to return an undamaged car to Alamo. Had your brother purchased such coverage, that would have been the end of it; no hassle, no red tape, no nothing.

If your brother, like me, relies on his own auto insurance policy to protect him in such situations, he should turn over Alamo's demand to his insurance company. The same applies if he has insurance through a credit card issuer. Time is of the essence. Most insurance carriers require prompt notification in order to pay such claims.

Good recommendations!

I'll review with my brother the findings here.. this happened a couple of years ago, and to my understanding there was no further discussion since the two phone calls..

My brother just avoids Alamo, worrying that if he was to rent again.. there would be red tape, or recourse.. If I was him.. I would just have my insurance or cc deal with the whole thing.. but some time has passed, and maybe Alamo's books is collecting dust.. or they got paid out by the person who rear ended my brother coming out of the airport lot..

Well what do you know.

Got a reply from Advantage today in response to my complaint email and they are going to refund the cost of insurance.

Well what do you know.

Got a reply from Advantage today in response to my complaint email and they are going to refund the cost of insurance.

Glad to know that the incident worked itself out..

Sometimes the workers are not properly trained to identify if you're covered sufficiently or not.. and default on insisting that you get the insurance..

Good that they are fully refunding you the insurance money..^

OP was scammed in my opinion. In 45+ years, I have never been asked to show an auto insurance policy in California, merely asked if I had insurance and if I waived the product offered by the rental company. Glad it all worked out, but the rental companies make huge markups on their "insurance" and other products; these companies are positively predatory in their practices.

Just finished my LAX 11 night stint..

Picked up rental vehicle and the guy at the counter says.. I should buy additional insurance for peace of mind..



This is correct, but it may have been for their peace of mind. A policeman can ask for proof of insurance, but how hard-assed they get with rentals I don't know, since I think it's usually the responsibility of the car's registered owner (which is not you in this case). I have also wondered the same thing, in various states, and now print out proof of my USAA policy to take with me (at least have the phone # of your insurance company). I've had many rental places try to talk me into insurance. I'm sure they're told to do that. No one has ever declined to rent to me when I declined. None has asked me to show proof of insurance. I imagine their cars are covered, as far as the law is concerned, by their company, which owns and registers the car. They usually tell you how you could be liable for the full value of the car, cost for loss of use (they can't rent the car while it is being repaired), etc. One person stopped as soon as I said I had USAA insurance. One in Detroit tried to convince me my insurance wouldn't be good in Canada (untrue). It is true that franchises can be a bit harder to deal with, sometimes due to misinformation.

Kudos to Aadvantage for their action. You should, of course, contact your insurance company for future reference.

What a rental company will do is charge for the damage in cases where one isnot covered by insurance or credit card coverage - often at rates your insurance company would not pay for because of the pricing - as well as "loss of service" charges that may be as much as a month's rental costs because they can not rent the car.

My AAA insurance is valid in the USA and Canada, and has significantly higher ceilings and better coverages - as well as coverage for stolen baggage, etc. from my homeowner's policy - than what the rental car company wants to palm off on me. Yes, agents are taught to try to sell the policies - as well as to "upgrade" for fees if possible.

Slightly off topic, it is certainly not valid in Mexico, where one needs to purchase separate insurance (but if one will be in Mexico for any length of time, I'd recommend checking into longer term policies sold by reputable companies in Mexico, and not at the border). This is important even if crossing from California into Mexico for a few hours - Mexican insurance acts as a bailor in case of accident.

This is correct, but it may have been for their peace of mind. A policeman can ask for proof of insurance, but how hard-assed they get with rentals I don't know, since I think it's usually the responsibility of the car's registered owner (which is not you in this case). I have also wondered the same thing, in various states, and now print out proof of my USAA policy to take with me (at least have the phone # of your insurance company). I've had many rental places try to talk me into insurance. I'm sure they're told to do that. No one has ever declined to rent to me when I declined. None has asked me to show proof of insurance. I imagine their cars are covered, as far as the law is concerned, by their company, which owns and registers the car. They usually tell you how you could be liable for the full value of the car, cost for loss of use (they can't rent the car while it is being repaired), etc. One person stopped as soon as I said I had USAA insurance. One in Detroit tried to convince me my insurance wouldn't be good in Canada (untrue). It is true that franchises can be a bit harder to deal with, sometimes due to misinformation.

Kudos to Aadvantage for their action. You should, of course, contact your insurance company for future reference.

In Canada, insurance is required.. and the driver must have on hand proof of insurance..

In the US.. I carry insurance proof as habit.. and know the importance of insurance proof because of law requirements in Canada..

So yes, I agree, its good to have proof of insurance, even if the insurance laws in the US allow rentals without insurance..

In Canada, insurance is required.. and the driver must have on hand proof of insurance..

In the US.. I carry insurance proof as habit.. and know the importance of insurance proof because of law requirements in Canada..

So yes, I agree, its good to have proof of insurance, even if the insurance laws in the US allow rentals without insurance..

California rental cars have an insurance certificate in the glove box (usually a certificate of self insurance).

We have AAA insurance as well and they send us 4 proof of insurance cards each year when we renew. I put one in my car, one in husband's car, and one in each of our wallets. I figure we are covered no matter what then.

I think there's commonly confusion over which insurance is required/available on rentals.

The owner of the vehicle (in this case, the rental agency) is required to have liability insurance on the vehicle. You, the renter, as a permissive user, are covered by their liability insurance when you operate the vehicle. This means damage or injury to third parties - not damage the rental car itself. That would be first party coverage which is a different issue. However, as others have pointed out, frequently the agency will only give you the benefit of the minimu required liability limits in the state. In California, that's $15,000 per person, $30,000 per accident for injury and $5,000 for property damage. It's fairly likely these days an accident will exceed those amounts. You may have additional coverage for liability through your credit card or your personal auto liability policy - YMMV. You should verify this before renting a vehicle.

As to damage to the vehicle itself, the rental agency will generally hold you fully responsible for damage to their vehicle. Your personal auto policy may step in using your collision/comprehensive coverage. However, you will be out the deductilble at a minimum and, frequently, the rental agencies will immediately charge you your deductible amount at the time of the damage. This is also another area of benefit from your credit cards where they may step in on your behalf while this is all being sorted out

I think there's commonly confusion over which insurance is required/available on rentals.

The owner of the vehicle (in this case, the rental agency) is required to have liability insurance on the vehicle. You, the renter, as a permissive user, are covered by their liability insurance when you operate the vehicle. This means damage or injury to third parties - not damage the rental car itself. That would be first party coverage which is a different issue. However, as others have pointed out, frequently the agency will only give you the benefit of the minimu required liability limits in the state. In California, that's $15,000 per person, $30,000 per accident for injury and $5,000 for property damage. It's fairly likely these days an accident will exceed those amounts. You may have additional coverage for liability through your credit card or your personal auto liability policy - YMMV. You should verify this before renting a vehicle.

As to damage to the vehicle itself, the rental agency will generally hold you fully responsible for damage to their vehicle. Your personal auto policy may step in using your collision/comprehensive coverage. However, you will be out the deductilble at a minimum and, frequently, the rental agencies will immediately charge you your deductible amount at the time of the damage. This is also another area of benefit from your credit cards where they may step in on your behalf while this is all being sorted out

This was a great response.

I have been trying to find out how much coverage we receive from "platinum" level cards.

It's obvious they cover the rental car itself from damage.

My question is what happens when I cause an accident? It doesn't seem that any of the CC's provide anything for damage or liability.

So all cars in the USA have liability coverage already, and that's baked into the rental agreement?

If I don't have insurance at all (I don't have a car) then using a credit card covers me completely?

Or completely up to the limits that they have on their car, which might be minimum? At that point, who would the "accident victim" come after? Me or the rental car company? I'd be at fault, but the rental place would also be liable for owning the car?

Tricky stuff but it seems very hard to find any good info on this. I'm hoping to add it to my blog. And of course get some clarity about what I need during my next rental...

Cheers,
Ryan

The injured party would come after the driver, which is you. However, if you leave the country, live outside the USA, and are not a US citizen or resident, and ignore all court documents, it would be very difficult, maybe even impossible, to take action against you.

Most drivers have an additional type of coverage called "protection against uninsured or underinsured drivers" which might also protect them.

I think there's commonly confusion over which insurance is required/available on rentals.

The owner of the vehicle (in this case, the rental agency) is required to have liability insurance on the vehicle. You, the renter, as a permissive user, are covered by their liability insurance when you operate the vehicle.

How does Hertz' stated policy fit in with what is highlighted above?

Liability Insurance Supplement
If renting in California:


Hertz provides no liability protection under the terms of the Rental Agreement to the renter from claims of injury by others against you resulting from an accident. Your personal/business insurance may cover your liability.


http://www.dmv.ca.gov/pubs/brochures/fast_facts/ffvr18.htm

Has the following:

In 2006, the law changed the way the Department of Motor Vehicles verifies insurance for privately owned vehicles.

Changes were made to ensure that vehicles driven on California roads have liability insurance that provides financial responsibility for any damage or injury caused by a traffic collision regardless of fault, and to remove uninsured vehicles from the highways.

Insurance companies in California are required by law (California Vehicle Code [CVC] §16058) to electronically report private-use vehicle insurance information to DMV. Insurance companies are exempt from electronically reporting insurance information for vehicles covered by commercial or business insurance policies.

Do the highlighted sentences above apply to rental cars- ie are rentals not privately owned and therefore not required to have the state-mandated minimum liability insurance thus allowing Hertz to make the statement quoted above?

I am confused :confused:

http://www.dmv.ca.gov/pubs/brochures/fast_facts/ffvr18.htm

Has the following:

In 2006, the law changed the way the Department of Motor Vehicles verifies insurance for privately owned vehicles.

Changes were made to ensure that vehicles driven on California roads have liability insurance that provides financial responsibility for any damage or injury caused by a traffic collision regardless of fault, and to remove uninsured vehicles from the highways.

Insurance companies in California are required by law (California Vehicle Code [CVC] §16058) to electronically report private-use vehicle insurance information to DMV. Insurance companies are exempt from electronically reporting insurance information for vehicles covered by commercial or business insurance policies.

Do the highlighted sentences above apply to rental cars- ie are rentals not privately owned and therefore not required to have the state-mandated minimum liability insurance thus allowing Hertz to make the statement quoted above?

I am confused :confused:

In California, proof of liability insurance is required in order to renew vehicle registrations.

It used to be done by mailing in a form provided by the insurance company along with the renewal notice and the annual license and registrations fees.

Because of fraud and counterfeit certificates of insurance, all proof of insurance must now be electronically transmitted directly by the insurance companies to the DMV. The exception you cited applies to business and commercial fleets where the policies are not written to cover specific vehicles but the fleet in its entirety.

The code section that you cited does not apply to individual car rentals, only to registration renewals. There is no legal provision mandating rental companies to provide the DMV with proof of insurance for each individual renter.

In California, proof of liability insurance is required in order to renew vehicle registrations.

If that is the case for all vehicles then I am still confused as to how Hertz can state

Liability Insurance Supplement

If renting in California:

Hertz provides no liability protection under the terms of the Rental Agreement to the renter from claims of injury by others against you resulting from an accident. Your personal/business insurance may cover your liability.

Take a look at this article:


California Rental Car Insurance (http://insurance.lovetoknow.com/California_Rental_Car_Insurance)
Requirements for California Rental Car Insurance

According to the Vehicle Code Section 16020, individuals who rent cars in California are required to demonstrate financial responsibility. An easy way to demonstrate financial responsibility is through the purchase of rental car insurance.

However, if you do not want to purchase rental car insurance, you can demonstrate financial responsibility in other ways. Depending on the company, you will most likely have to sign a contract if you choose not to purchase car insurance. This contract states that you understand if the car acquires any damages, you are responsible for the cost of those damages.

This contract may also require for you to inspect the car for any scratches and write them down prior to renting the car. This ensures that any new significant scratch obtained during your rental will be your financial responsibility to pay.

One thing that you need to understand, however, is that insurance is required for any driver in California. Thus, if you don't want to purchase car insurance through the California agency, you must still legally have some type of car insurance for the permanent car that you drive, or you cannot drive in California. While this differs from agency to agency, certain agencies may require you to prove that you have liability insurance if you opt not to purchase rental car insurance through the agency.

Take a look at this article:


California Rental Car Insurance (http://insurance.lovetoknow.com/California_Rental_Car_Insurance)


Thanks for the article - I read many linked pages but the question I asked in my last post is still unanswered.

If as was stated above a car cannot be registered without basic liability insurance attached to it how can Hertz state that:

If renting in California:

Hertz provides no liability protection under the terms of the Rental Agreement to the renter from claims of injury by others against you resulting from an accident. Your personal/business insurance may cover your liability.

Sorry to be repetitive but it seems the fundamental point of this thread is still not clarified. The law seems to say all cars must have basic liability insurance. Hertz seems to be saying that their cars do not. This seems somewhat discordant

Sorry to be repetitive but it seems the fundamental point of this thread is still not clarified. The law seems to say all cars must have basic liability insurance. Hertz seems to be saying that their cars do not. This seems somewhat discordant

I don’t have the time or desire to research the fine legal points.

My educated guess is that Hertz is self insured and will pay liability claims and judgments when required.

On the other hand, Hertz and other car rental companies can and do mandate renters to have their own liability insurance or to buy such coverage from the rental company as a condition of the rental agreement.

Should a renter get into an accident and not have liability insurance in effect, Hertz will settle the claim, pay the damages and then sue the renter to recover its losses. There are several threads on FlyerTalk discussing similar situations.

I don’t have the time or desire to research the fine legal points.

My educated guess is that Hertz is self insured and will pay liability claims and judgments when required.

On the other hand, Hertz and other car rental companies can and do mandate renters to have their own liability insurance or to buy such coverage from the rental company as a condition of the rental agreement.

Should a renter get into an accident and not have liability insurance in effect, Hertz will settle the claim, pay the damages and then sue the renter to recover its losses. There are several threads on FlyerTalk discussing similar situations.

I agree with this. Hertz is saying that they provide no liability protection *to the renter*, and thus you can be personally sued for all damages. They are required, by law, to have insurance as the owner of the car for the benefit of a victim. That insurance (self or other) would pay the victim as required, then turn around and subrogate the claim to the renter (boy I hope I used that term correctly!)

As a victim, I believe you would generally make claims (often via your own insurance) against both the car owner and the driver, and let them argue it amongst themselves.

Thanks for the article - I read many linked pages but the question I asked in my last post is still unanswered.

If as was stated above a car cannot be registered without basic liability insurance attached to it how can Hertz state that:

If renting in California:

Hertz provides no liability protection under the terms of the Rental Agreement to the renter from claims of injury by others against you resulting from an accident. Your personal/business insurance may cover your liability.

Sorry to be repetitive but it seems the fundamental point of this thread is still not clarified. The law seems to say all cars must have basic liability insurance. Hertz seems to be saying that their cars do not. This seems somewhat discordant

As others have stated, Hertz must be in compliance with financial responsibility laws that require the legal owner of a vehicle to provide for liability insurance or approved self-insurance. It appears that they are not, however, obligated to provide liability protection for the renter.

The reality of a loss is that, unless the injuries/damages are so severe as to not be satisfied by Hertz's insurance or financial resources, they likely will not come after the renter directly. Not to say the cannot, but they will generally care more about being made whole financially versus targeting a specific individual.

Additionally, as Hertz is likely self-insured, they probably want to make sure that if they had to potentially kick in for the renter, they are clearly going to be excess over the renter's own liability insurance (who also wishes they were excess).

In my experience, it's usually a mess to sort out.

Thanks for the explanations - you have satisfied my bewildered curiosity.

There must be an cleaner/more efficient way of doing this - but perhaps too many snouts in the trough such that there is little motivation to go for efficiency.

Most states: third-party liability insurance to state minimums is provided on a secondary basis. (That is, you must exhaust your own coverage limits before the rental company's underwriter will kick in.)
A small handful of states: third-party liability insurance to state minimums is provided on a primary basis.
California: no liability insurance is extended to you. You are fully responsible for any and all claims that arise as a result of damage caused to others by the vehicle while it is on rent to you. There has actually been a few posts on FlyerTalk by members who rented a car in California, declined the rental company's liability coverage, and did not have third-party coverage on their own. It wasn't pretty.

Sounds shady to me. I'm an insurance agent in California. Credit card should have sufficed. You shouldn't need to show proof of insurance at the rental counter.

Response to old quote, but I wanted to clear this up. Credit cards don't cover liability. Ever. A credit card is not a valid form of proof for third-party liability coverage. (It may be considered proof of coverage for damage to the rental car, but the State of California does not care whether you have the means to reimburse the rental company for damage to the rental car, so that is a non-issue.)

Here's a write-up that should clarify a few things: http://www.quora.com/Rental-Cars/Whats-the-best-car-rental-insurance-option-for-someone-without-any-coverage

I can't speak to the issue of whether a rental company in California can require proof of coverage from you.

I fully appreciate your position; however, others may be differently situated.

In California, rental car companies provide only the minimum legally required liability insurance, which is 15/30/5. That translates to $15,000 for bodily injury, with a maximum of $30,000 per accident with multiple victims, and $5,000 in property damage. That is grossly inadequate.

A renter who has no primary or secondary auto insurance who gets into an accident where the damages exceed the rental company provided liability coverage may end up suing the rental company for not properly warning him or her about the need to be properly insured.

I have a question: This coverage that is being provided by the car rental company (Avis), when i rent the car and not purchase the Additional Liability Coverage from them (declined), am i still covered by the car rental company up to these standards?
Thank you

I have a question: This coverage that is being provided by the car rental company (Avis), when i rent the car and not purchase the Additional Liability Coverage from them (declined), am i still covered by the car rental company up to these standards?
Thank you

I wouldn't count on that (in any state) -- the previous posts in this thread state that it is not extended to the renter. A few perspectives:

1) For a victim of an accident that the rental driver was at fault, they would likely sue the car's owner (the rental agency) as well as the driver. Avis may well be required by the state to have minimum coverage (or prove they self-insure) and pay the victim. HOWEVER, unless that coverage is explicitly stated in the rental agreement as covering the renter even if additional liability coverage is not paid for, it's very likely they would turn around and come after the renter for the outlay (subrogation). And in any case, the renter might be held criminally responsible for driving without sufficient coverage.

2) The state minimums are very low -- I would never drive with only that coverage. It's very easy to cause injuries many times that. Even if you don't have any assets, it is socially irresponsible to me to not be able to pay for legitimate injuries that one causes. Personally, I'd love to see laws limiting what people can *collect* in an accident that's not their fault to the coverage limits that they themselves maintain and are prepared to *pay* if it was their fault. I'll bet a lot fewer under/uninsured drivers would be on the road!