LEGAL FACTS ABOUT CAR RENTAL COVERAGE

Car rental companies are not exempt from their duty to insure cars that they own. When you rent a car you are asked who will be driving the car. You can list a driver at that time or later you may decide to let someone in your household drive the car without your permission. If that person you loan the rental car gets into an accident and injures another person then who is liable? You are liable, the person who borrowed the car is liable and also the car rental company is liable.

The car rental company will say that they are not liable because the person who drove the car was not the person to whom they rented the car but this is not true. Under O.C.G.A. § 33-34-4 the car rental company must provide insurance that will cover the injured party. The rental company will not be first in priority to pay but they will have to pay if there is no other insurance available to the injured party. Jones v. Wortham, 201 Ga.App. 668, 670, 411 S.E.2d 716 (1991).

This issue comes up when the person renting the car tries to avoid liability by stating that the at-fault driver used the car without permission. By making this claim the insurance company for the renter of the vehicle will deny coverage stating that it was “not permissive use.” The car rental company ultimately will have to pay the claim whether the renter purchased “spot” insurance or not. Georgia law requires a car rental company to provide liability coverage for its vehicle if the innocent victim of a traffic mishap with a rental vehicle would otherwise be left without a remedy.

If you have any concerns involving this issue, please don’t hesitate give us a call.