What happens if I end up in a car accident in a rented car? Renting a vehicle is a good alternative to buying. Drivers can rent newer models for less than the cost of buying without worrying about vehicle maintenance or committing to a single car for the next 10 years. Dealers today rent about 3 out of 10 cars that leave the lot, according to US News. What many drivers are not as sure about as the actual rental agreement is what happens if they end up in collisions in rented vehicles. Lack of ownership can pose unique legal issues. You are entitled to compensation if you are involved in an accident in a rented car.
What is a rented car?
The traditional way to get a new car is to buy one. Most buyers take out car loans to buy new cars and then pay off their car loans over time (usually in monthly installments). Not all drivers want to buy or own their vehicles, however. Renting a car is an alternative to buying. It is similar to renting a vehicle, except that the driver will have a long-term contract with the landlord.
in a leasing agreement, the driver pays for the depreciation of the vehicle during the leasing period, in addition to the lessor’s fees and interest. For example, if you rent an SUV worth $ 30,000 for three years, and the estimated depreciated value of the SUV at the end of the three years is $ 20,000, you pay the difference: $ 10,000. The lessor divides your payments into installments under your lease. At the end of your contract, you will renew your lease or return the vehicle to the dealer.
insurance requirements for rented vehicles
You may not own a rented vehicle, but you still have to pay for insurance to legally drive it in the state of Nevada. Taking out rental car insurance ensures that you have the coverage you need in the event of an accident. To ensure that your policy will protect you from financial liability after a crash, at least meet the minimum insurance requirements in Nevada.
- $ 25,000 in personal injury insurance per person
- $ 50,000 in personal injury insurance by accident
- $ 20,000 in property damage insurance
Most vehicle leasing companies require you to pay for insurance coverage in addition to the minimum amounts required. For example, you may need to purchase Guaranteed Asset Protection (GAP) coverage. GAP coverage protects the leasing company by fulfilling your financial obligation to the COMPANY if you totally the vehicle or someone steals it.
You may also want to purchase additional types of coverage to pay for your personal medical bills or losses in a fault accident, such as a collision or comprehensive car insurance. The more insurance you buy, the stronger your liability protection after a crash.