What Happens If You Crash a Rental Car in Texas?
Key Takeaways
- Crashing a rental car in Texas makes you responsible for returning it in its original condition, regardless of who caused the accident.
- Coverage typically comes from one or more of three sources: your personal auto insurance policy, the rental company’s optional coverages, or your credit card’s rental benefit.
- Texas is an at-fault state, meaning the driver who caused the crash is generally responsible for damages, but modified comparative fault rules can reduce or eliminate your recovery if you share fault.
- A Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW) from the rental company is not insurance. It only protects you from being charged for damage to the rental vehicle, not for injuries or damage to others.
- Rental crashes can come with costs your personal car accidents don’t, including loss-of-use fees, diminished value claims, and administrative charges.
- You should report the crash to your personal auto insurer even if you purchased coverage from the rental company.
- If you were injured or are facing disputed liability, speaking with a Texas personal injury attorney can help you understand your options before you give recorded statements or accept a settlement.
What Happens If You Crash a Rental Car in Texas?
When you crash a rental car in Texas, you’re responsible for returning the vehicle in the condition you received it, even if another driver caused the accident. That responsibility exists because of the rental agreement you signed, which makes the car your liability for the duration of the rental period.
How the costs get covered depends on what insurance is in place at the time of the crash. Coverage typically comes from one or more of three sources: your personal auto insurance policy, optional coverages offered by the rental company, or a rental benefit through your credit card. In some cases, the at-fault driver’s liability insurance is also responsible for your losses.
Beyond the repair costs you’d expect from any car accident, rental crashes can trigger additional charges specific to rental agreements, including loss-of-use fees, diminished value claims, and administrative fees. Understanding where your coverage starts and stops before those bills arrive makes a significant difference in what you end up paying out of pocket.
What to Do First After a Rental Car Crash
You can take some comfort in knowing that a rental car crash in Texas is handled much like crashing your personal car. Follow these steps first:
- Report the crash to your personal auto insurance company, even if you purchased coverage from the rental company.
- Make sure everyone is safe and call 911 for any injuries.
- Collect contact information from the other driver, the other passengers, and any witnesses.
- Exchange insurance information with the other driver.
- Take photos and written notes documenting the scene, damage, and any visible injuries.
- Obtain a copy of the police report if available at the scene, and get the name and contact information of the responding officer.
When you rented the car, you agreed in the rental contract to return it in the condition it was in when you picked it up. That obligation applies regardless of who caused the crash.
How to Report a Rental Car Accident
Once you have gathered all the above information, call the rental car company emergency number. The number is often located on a sticker in the glove box and is also on your rental car agreement. When you call the rental car company, take the following steps:
- Tell them what happened, but avoid making statements that suggest you were responsible for the accident.
- Contact the rental company for instructions on returning the damaged vehicle or, if it’s not drivable, which towing service to use.
- Take down the name, contact information (including employee ID number), and claim number from the rental company agent.
After dealing with the rental car company, call your own insurance company and report the accident. If you used a major credit card to rent the car, report the accident to them as well. You may also need to complete an accident report form for the rental company, which will likely ask for similar information as the police report.
What Happens During the Insurance Investigation
Once you’ve reported the crash, insurers on one or more sides will begin their own investigation before paying any claim. Understanding what that process involves helps you avoid mistakes that could reduce what you recover.
Adjusters typically review the police report, photos from the scene, the rental agreement, your recorded statements, and any medical documentation. If multiple insurers are involved — for example, your personal auto policy and the rental company’s coverage — they may dispute which policy is primary before either pays out. These disputes can delay reimbursement and are one reason to document everything carefully from the start.
One of the most important practical steps at this stage is to avoid giving a recorded statement to the other driver’s insurance company without first speaking to an attorney. Those statements can be used to assign you a higher percentage of fault under Texas’s comparative fault rules, which directly affects how much you can recover.
Who Pays If You Crash a Rental Car in Texas?
In any car accident, insurance addresses two categories of loss: property damage to the vehicles involved and personal injury liability for anyone hurt in the crash. Because Texas does not require you to carry additional insurance when renting a car, how a rental crash gets covered depends on what policies you have in place. The three primary sources are your personal auto insurance, the rental company’s optional coverages, and credit card rental benefits.
Your Insurance
Most personal auto insurance policies extend coverage to rental cars, including liability for injuries and collision damage. However, some policies exclude long-term rentals, and your deductible still applies. Review your policy before relying on it, and confirm the coverage limits — particularly for liability — since rental crashes sometimes involve more complex claims than a standard fender bender.
Rental Car Company Insurance
Rental companies typically offer four types of coverage at the counter. Understanding what each one does and doesn’t cover helps you avoid gaps.
Collision Damage Waiver (CDW) / Loss Damage Waiver (LDW)
This is not insurance. It is a contractual agreement that the rental company will not charge you for damage to their vehicle. CDW/LDW often also covers loss-of-use fees and administrative charges per the contract terms. What it does not cover is your liability to other people injured in the crash or damage to their property. For that, you need either Supplemental Liability Insurance or your own personal auto policy.
Supplemental Liability Insurance (SLI)
This covers damage to other people’s property and injuries to the other driver and passengers. If you carry adequate personal auto liability coverage, SLI will likely overlap with it; but if your policy limits are low, SLI can provide meaningful additional protection, particularly in serious crashes.
Personal accident insurance
This covers injuries to you and your passengers. It often overlaps with personal injury protection or medical payments coverage on your personal auto policy, or with your health insurance.
Personal effects insurance
This covers loss of personal belongings belonging to you and your passengers. If you have homeowner’s or renter’s insurance, it may already cover this.
Credit Card Insurance
Some major credit cards automatically include rental car coverage, but the details matter significantly. To activate coverage, you typically must have paid for the rental with that card and declined the rental company’s CDW/LDW. If you accepted the rental company’s waiver, most credit card benefits will not apply.
Most credit card rental coverage is secondary, meaning it pays costs that your personal auto policy doesn’t cover, rather than replacing it. It almost never covers liability for injuries to other people, only damage to the rental vehicle itself. Common exclusions include trucks, exotic or luxury vehicles, and rentals outside the United States. Claim timelines and documentation requirements vary by card issuer, so if you plan to rely on this coverage, contact your card company before the rental to confirm exactly what applies.
Texas Liability Rules That Affect Who Pays
Because Texas is an at-fault state, the driver responsible for causing the crash is generally responsible for the resulting damages. If another driver caused the accident, their liability insurance should cover repairs to the rental car, your medical expenses, and other covered losses. You’ll still need to report the accident to the rental company and your own insurer to ensure the claim is processed correctly.
Texas also applies modified comparative fault rules, which means your compensation can be reduced by your percentage of fault. If you are found to be 51% or more responsible for the crash, you recover nothing. Insurers sometimes attempt to assign a higher fault percentage to claimants than the evidence supports, which is one reason why preserving photos, witness information, and documentation from the scene matters and why recorded statements should be approached carefully.
Texas’s minimum liability limits are $30,000 per person and $60,000 per accident for bodily injury, and $25,000 for property damage: sometimes written as 30/60/25. If the at-fault driver carries only minimum coverage and your losses exceed those limits, Supplemental Liability Insurance from the rental company or your own uninsured/underinsured motorist coverage may be the difference between full recovery and paying out of pocket.
When Can the Rental Company Be Liable?
The federal Graves Amendment generally shields rental companies from being held liable simply because they own the vehicle involved in a crash. You typically cannot sue a rental company solely on the basis of ownership.
However, rental companies can still be held responsible in certain circumstances. If the crash involved a mechanical defect or maintenance failure the company knew about or should have known about, they may share liability for the resulting harm. Negligent entrustment — renting a vehicle to someone who was clearly unfit to drive, such as an unlicensed driver — is another basis on which rental company liability has been established. These situations are less common but worth understanding if the rental vehicle itself contributed to the crash.
Costs Outside of a Regular Car Accident
A rental car crash in Texas can generate additional costs that don’t come up when you damage your own vehicle. Knowing what these charges are and what rental companies are actually entitled to claim can save you money.
- Loss of use: The rental company may charge a daily rate for every day the car is out of service for repairs, representing revenue they lost while the vehicle couldn’t be rented. Texas law requires them to document actual lost rental income; they cannot simply bill a flat daily rate without evidence. Request their utilization records if this charge appears.
- Diminished value: Even after repairs, a car with a documented accident history is worth less on resale. Rental companies can claim this difference in value. Any diminished value charge should be supported by an appraisal, not assumed or estimated without documentation.
- Administrative fees: These cover the rental company’s internal costs for managing the claim and returning the vehicle to their fleet. They are often a flat fee. Review your rental agreement, as some contracts cap administrative fees or exclude them depending on your coverage.
Hartley Law Firm Is Here to Help You After a Rental Accident
Hartley Law operates offices in Carrollton and Rockwall, Texas, where you can speak with an experienced car accident attorney about your situation. If you were injured in a rental car crash or are facing disputed liability, lost wages, or unexpected costs from the rental company, Hartley Law can help you understand what coverage applies and what options you have. Contact us to schedule a free consultation.
Frequently Asked Questions About Crashing a Rental Car in Texas
What should I do immediately after an accident in a rental car?
After a rental car accident, prioritize safety first. Make sure everyone is okay and call 911 if anyone is injured. Exchange information with the other driver, notify the rental company, and report the accident to your personal auto insurance provider. Document the scene with photos and written notes before leaving.
Does my auto insurance policy cover accidents in rental cars?
In many cases, your personal auto insurance policy extends coverage to rental vehicles. However, the specifics depend on your policy. Contact your insurer to confirm what coverage applies, including liability, collision, and comprehensive coverage, and check whether your policy excludes long-term rentals.
Should I purchase car rental insurance from the rental agency?
It depends on what coverage you already have. If your personal auto policy and credit card provide adequate coverage, the rental company’s options may overlap significantly. If you have coverage gaps (particularly for liability), the rental company’s Supplemental Liability Insurance may be worth considering.
Who pays for the damages if I have an accident in a rental?
It depends on the coverage in place and who caused the crash. If another driver is at fault, their liability insurance is generally responsible for repairs to the rental car, your medical bills, and other covered losses. If you caused the crash, your personal auto policy, rental company coverage, or credit card benefit may apply, depending on what you have. If a mechanical defect or negligent maintenance by the rental company contributed to the crash, the company may share responsibility.
Can the rental company charge me for damages even if I have insurance?
Yes. The rental company may initially charge you for damages directly. If you have coverage through your personal auto policy, a rental company CDW/LDW, or your credit card, you can submit a claim for reimbursement. Keep all documentation of charges and correspondence.
What happens if the accident wasn’t my fault?
If another driver caused the accident, their liability insurance should cover damages to the rental vehicle, your medical expenses, and other covered losses. You’ll still need to report the accident to the rental company and your own insurer to ensure the claim processes correctly.
Do I need to file a police report after an accident in a rental car?
Yes. Rental agencies and insurance companies typically require an official police report to process claims. It also creates a documented record of how the crash occurred, which can matter if fault is disputed later.
What if I didn’t purchase insurance from the car rental company?
Your personal auto policy may cover the accident, subject to your policy terms and deductible. Some credit cards also offer secondary rental coverage if you paid with that card and declined the rental company’s CDW/LDW. If you have no personal auto insurance and declined the rental company’s coverages, you may be personally responsible for repair costs, diminished value, loss-of-use fees, administrative charges, and any third-party injury or property claims.
Can I still drive the rental car after an accident?
That depends on the extent of the damage. Notify the rental company immediately, and they will determine whether the rental vehicle is safe to drive. You may need to exchange the car for a replacement.
How can I avoid unexpected costs after an accident in a rental car?
Review your personal auto policy before renting so you know what’s covered. If you plan to rely on credit card coverage, confirm the activation requirements and exclusions with your card issuer before the trip. Follow the rental company’s accident reporting process carefully, and keep records of all charges, particularly loss-of-use fees and administrative charges, which rental companies must be able to document.
Will my insurance go up if I crash a rental car?
Filing a claim on your personal auto policy after a rental crash can affect your premiums, particularly if you are found at fault. Using the rental company’s CDW/LDW or your credit card’s rental benefit instead of your personal policy may avoid a claim on your record, though this depends on the circumstances and your insurer’s policies.
Does the at-fault driver have to pay for my rental car in Texas?
If another driver caused the crash, their liability insurance is generally responsible for reasonable costs related to the rental vehicle, your medical expenses, and other covered losses. You should report the accident to both the rental company and your own insurer to ensure the claim is handled correctly.
Can I sue the rental company just because they own the car?
Generally no. The federal Graves Amendment shields rental companies from liability based solely on vehicle ownership. To hold the rental company responsible, you would typically need to show negligent maintenance, such as a known mechanical defect, or negligent entrustment, such as renting to a driver who was clearly unfit.
Is credit card rental coverage primary or secondary?
Most credit card rental coverage is secondary, meaning it applies after your personal auto policy pays out. It typically covers damage to the rental vehicle only and does not cover liability for injuries to others. To activate it, you generally must have paid for the rental with that card and declined the rental company’s CDW/LDW.
What is a Loss Damage Waiver (LDW) or Collision Damage Waiver (CDW)?
CDW/LDW is a contractual waiver from the rental company that eliminates your responsibility for damage to the rental vehicle and often covers loss-of-use and administrative fees per the contract. It is not insurance, and it does not cover liability for injuries to other people or damage to their property.
How does Texas’s 51% comparative fault rule affect my rental car crash claim?
Texas reduces your compensation by your percentage of fault. If you are found to be 51% or more responsible for the crash, you cannot recover anything. Because insurers may attempt to assign you a higher fault percentage than the evidence supports, preserving documentation from the scene and being cautious about recorded statements can directly affect your recovery.
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