I'm wondering about how Avis handles liability for damage to another car in VA or another state that allows car rental agencies to self-insure. According to Avis's terms, it provides liability coverage up to the minimum required by the state, included in the rental cost. (It also provides supplemental liability coverage for an additional charge, but that only covers costs in excess of the state's minimum coverage amount.) It also says that it can either self-insure or insure through an insurance co. I know in Virginia, car rental companies are allowed to self-insure and most if not all companies do so. There's also a Virginia court case that says that even though a rental car co. has to pay damage costs to the other driver, if it is self-insured, it can also recover those costs from the lessee if the lessee was at fault and the rental agreement includes an indemnification clause--and Avis agreements do contain indemnification clauses. This seems to mean that, if I cause an accident, I will end up having to pay up to $20,000 (the state minimum) even if I were to pay for the supplemental liability coverage, because the latter coverage only applies to damage above that amount, and the indemnification clause essentially makes the automatic liability coverage worthless to me if Avis decides I am at fault. (This is assuming I have no separate car insurance because I don't have my own car.) But this seems inconsistent with the statement in Avis's terms that "anyone driving the car who is permitted to drive it by the Rental Agreement will be protected against liability for causing bodily injury or death to others or damaging the property of someone other than the authorized driver and/or the renter up to the minimum financial responsibility limits required by the law of the jurisdiction in which the accident occurs."

Does anyone know how this works in practice?