Georgia Legal Guide: Who Pays When a Rental Car Accident Happens?
Key Points:
- Georgia law reverses normal insurance rules. When rental cars are involved, the renter’s personal insurance pays first, and the rental company’s insurance pays secondarily
- You may have access to more money. Both the driver’s personal insurance as well as the rental company’s coverage can be made available to pay for your injuries
- Uninsured car renters trigger the rental company’s responsibility. If the person driving the rental car has no insurance, the rental company’s insurance must pay first
- Time limits do apply. You have two years under Georgia law to file an injury lawsuit, but you should start the claims process immediately
Whose insurance will pay for my injuries if I’m hit by somebody driving a rental car?
If you or a loved one is injured in an accident that involves a rental car, you may be confused about which insurance company should be responsible for covering your medical bills and damages. The answer might surprise you. In accidents where a rental car is at fault, Georgia law changes the normal insurance rules.
Why is Georgia’s Rental Car Insurance Rule Different?
Under ordinary circumstances in Georgia, the car insurance policy “follows the car.” This means if you’re driving your friend’s car and cause an accident, your friend’s insurance pays first, and your personal car insurance only kicks in if their coverage isn’t sufficient.
However, when it comes to rental cars, Georgia law requires that any person who rents motor vehicles from a car rental company must provide car insurance, so the coverage no longer follows the car as usual. (Please see: [O.C.G.A. § 40-9-102]) This particular provision in the law turns this usual rule upside down. Instead of the rental car company’s insurance paying first, the person renting the car must provide the primary insurance coverage, which then pays first.
A Hypothetical Example: Vanessa’s Beach Vacation Goes Wrong
Vanessa rented a car from Budget for her family’s vacation to Savannah. On the second day, while driving to Sandy Springs, she accidentally ran a red light and crashed into Mark’s pickup truck. Mark suffered a broken arm, and his truck was totaled with damages exceeding $85,000.
Here’s who pays what under Georgia law:
- Vanessa’s personal car insurance will pay first (up to the limit of her policy, of $50,000). Even though she was driving Budget’s rental car, in Vanessa’s case, her insurance is considered “primary coverage.”
- Budget’s rental car insurance only kicks in after Vanessa’s coverage has been exhausted. Budget’s insurance will pay the remaining $35,000. This is called “excess” or “secondary” coverage.
- If Vanessa had purchased the additional “spot,” or temporary insurance available through Budget when she rented the car, that policy would have been deemed to be the primary insurance instead of her regular personal policy.
What This Means for Your Accident Case
If you’ve been injured by someone driving a rental car, this rule could work in your favor. Here’s how:
There is more money accessible: Instead of being limited to just the rental company’s insurance, you may have access to both the other driver’s insurance as well as the funds from the rental company’s coverage.
You have a better chance of full compensation: Rental companies typically carry higher insurance limits than individual drivers, so you’re more likely to recover the full amount of your damages.
The responsibility is much clearer: Georgia law makes it clear who pays first, which can speed up your claim process considerably. However, there’s one important exception: if the person driving the rental car has no insurance at all, then the rental company’s insurance becomes primary and must pay first.
Why This Law Exists
Georgia created this rule as a way to protect rental car companies from having to provide primary coverage for every customer who rents a vehicle. Instead, the law places the responsibility on the renter to have adequate insurance coverage before getting behind the wheel.
What You Should Do After a Rental Car Accident
- Get information about all insurance policies, not only the driver’s personal insurance but also the rental company’s coverage
- Don’t discount the car rental company as a source of compensation – they’re still responsible for excess coverage
- Remember to contact an experienced attorney. You may not know your rights or how to protect them. Navigating multiple insurance policies can be a very complex process, and especially so for people who are not well-versed in the law
- Act quickly – Georgia law requires you to file injury claims within two years of the date of the accident
The rental company is ultimately responsible for ensuring that coverage exists before handing over the keys. Therefore, according to Georgia law, if the rental company fails to verify that the renter has insurance, the rental company loses its protection, and its insurance becomes primary.
The statute applies to traditional car rental agencies, but courts have consistently interpreted it to reverse the normal priority of insurance coverage as noted above. However, if the rental contract specifically states that the rental company’s insurance will be primary, that contractual provision can override the statute.
Yes, this is exactly how Georgia’s rental car law allows the driver’s insurance to pay first, up to its limits.. After that coverage limit has been reached, the rental company’s insurance provides the additional coverage. This “stacking” can potentially give you access to much more compensation than you’d have with just one policy.
If you were driving the rental car and caused an accident, your personal car insurance would be primary and pay first. The rental company’s insurance will only pay after your own coverage is exhausted, which could leave you personally responsible for any damage costs remaining.
Under O.C.G.A. 40-9-102, rental companies cannot completely escape liability. They are required to provide excess coverage even if the renter is already insured. If they try to deny coverage entirely, they may be violating Georgia law.
Consider contacting an attorney right away to learn to preserve and protect your rights.
No, rideshare vehicles are not considered traditional rental cars under Georgia law, so O.C.G.A. 40-9-102 does not apply to them. Uber and Lyft accidents follow different insurance rules, and these companies typically provide their own commercial coverage for accidents that occur during rides.
