wahooflyer

I rented a Cadillac from National at DCA this weekend to take a road trip up to Connecticut.

On my return Sunday night, I rear-ended an Audi while turning out of the Exxon in Crystal City (right before the ramp to the airport). We both pulled over into a nearby parking lot, called the police, and exchanged insurance information. There was only minor damage to both cars' bumpers and no one was hurt. Visa will pay for the damage to the Cadillac and I assumed my own liability insurance through State Farm would cover the cost of repairs to the other driver's vehicle.

The Audi owner took the initiative and called State Farm Monday morning to initiate a claim on my behalf. Soon after, I received a call from a rep in National's claims department, who explained to me that Virginia law requires the vehicle's owner or insurer (in this case, National is licensed as a self-insurer) to pay out the liability claim---not State Farm! The rental car had Virginia license plates and the accident occured in Virginia.

I have a feeling my premiums will go up in January because the other driver reported the accident to my insurance company, even though State Farm won't have to cover the rental car liability claim.

Are there any other states that have laws similar to this? Is it the rental vehicle's Virginia registration or the fact that the accident happened in Virginia that required National to be responsible for the liability portion of the claim? I have always been under the impression that rental car drivers who do not have their own auto insurance must purchase liability coverage from the rental agency. Seems like this is not required in Virginia, though I know some of the smaller car rental companies in California demand a copy of a renter's personal insurance card if the ALI is declined.

jan_az

If the other driver reported it to your State Farm agent - you should be OK - normally they do not onward file reports where no claim is actually made for money.

I dont know about the laws- that is a very interesting question and one I have never had come up before

LouiseMc

Just a little off your topic but I am so disgusted with insurance companies. I had a minor accident going about -1 mile an hour backing into another car in a parking lot. The cost with the other person renting a car for the minor repair was $1,000. I am almost a senior and have never had an accident or a ticket. My insurance, AARP Hartford, went up $300 a year for 3 years. No amount of complaining made any difference. Because I have my house and car insurance with them I couldn't find anything cheaper so I suppose I should be happy with what I have but I will think twice about reporting a minor accident in the future.

Schutzee

Read your policy! If you fail to report an accident, no matter how minor, your insurance company can and will deny coverage. You would be surprised how often a "minor" claim becomes a liability lawsuit two years and eleven months after the accident. I'm sure it has nothing to do with New York's three year statue! The cost of an out of pocket defense makes a premium increase look attractive!

pinniped

I don't think Virginia is unusual: the owner of a car is required to provide a minimum level of liability insurance for that car. It's common in most (all?) states.

In your scenario, I would have expected National's insurance to pay for the Audi, your State Farm policy to pay for the Caddy, and Visa serving only as secondary insurance (if needed) on damage to the Caddy.

If you had Diner's Club, then I would say that State Farm can be completely uninvolved.

But I'm not really sure how these things work these days...

fastflyer

There was a thread discussing a similar concern recently.

My impression is in line with what National and the Commonwealth of Virginia told you: that the owner of the car must maintain liability insurance. And one of the reasons is that for people who do not own cars, many (probably the great majority) do not have liability insurance.

The big potential costs are the liability costs. If you damage the rental vehicle, that cost is rather limited. But if a driver without a car and hence without liability insurance kills a pedestrian, there needs to be a million-dollar payor, and this is where the owner's liability insurance covers the risk.

AllanJ

The vehicle's owner has to make payment in case the driver was not insured... but are you sure the vehicle's owner can't come after the driver later (subrogate) for the damages whether or not the ddriver was insured?

Some rental companies have in their rules/policies the right to demand that you purchase their "optional" coverages under some conditions such as your not being a citizen of the country or your not having that kind of coverage on your own car. If the rules don't say so, then you are not obligated to purchase optional coverages.

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