Avis liability coverage in VA/self-insurance state
 

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?

A few observations:

1. If you purchase supplemental liability insurance through Avis, and do not do anything that voids the coverage, I would be very surprised if Avis could recover anything from you -- other than an amount in excess of one million dollars -- if you were to injure someone or damage a third party's property. I'm not aware of a $20,000 (or any) deductible on the supplemental liability insurance.

2. If you do not own a car, but rent cars with some frequency, you might consider looking into the cost of a personal, non-owner auto-liability policy. Mine is from Travelers Insurance.

3. If minimal third-party-liability coverage would be satisfactory to you (it wouldn't be to me), you could join AARP: AARP members who rent from participating Avis/Budget locations in the U.S. get a small amount of primary, third-party-liability coverage when using the AARP discount code on the rental. Details here:

https://www.avis.com/en/association/A359866

4. And, of course, if you charge a car rental to certain credit cards, you would get primary or secondary LDW coverage, which would cover loss of, or damage to, the rental vehicle -- but no third-party-liability coverage.

For comparison purposes, here is Hertz' policy re: providing liability coverage in various states:

https://www.hertz.com/rentacar/reser...RAGES&EOAG=LAX

That's what I would have thought but I was looking at this

If you elect to purchase SLI, coverage will be provided to you and any authorized driver under an excess coverage automobile policy issued to Avis. SLI provides protection for third party automobile claims for the difference between the minimum financial responsibility limits provided under paragraph 21 above and a maximum combined single limit of liability of $1,000,000 or $2,000,000 depending on the jurisdiction of rental and vehicle type for bodily injury, death or property damage for each accident.

Rental Terms and Conditions | Avis Rent a Car

That language seems to in effect impose a deductible but I wondered if Avis has ever actually implemented the SLI that way.

I did find this language in the Virginia Supreme Court decision:

"Baasanjav could have purchased the SLP, which would have afforded him independent insurance against his obligation to indemnify Enterprise for the damages paid to the third party. By declining to purchase the SLP, Baasanjav subjected himself to the terms of the indemnification provision, which required him to indemnify Enterprise for damages paid to the third party."

(I'm not sure if the SLP coverage offered by Enterprise in that case differed from the SLP/SLI coverage offered by Avis currently.)

In any event, joining AARP and renting from participating Avis/Budget locations with the AARP codes should avoid any issue, as should having a personal, non-owner, automobile-liability policy, which, depending on where one lives, can be surprisingly affordable.

Note that people who have not yet turned 50 can still join AARP, and enjoy its member benefits. But unless you're willing to go with only minimal third-party-liability coverage, getting your own policy can be cost effective if you rent cars for a fair number of days every year. (The exact break-even point will depend upon your premium, which will vary depending on your age and driving record, where you live, and -- possibly -- your credit score. I just renewed my policy recently, and the six-month premium was all of $30 for 500/500/200 coverage, or $5/month.)