I did a little research on this, and it does appear that California law requires renters to have or purchase liability coverage. Since the vast majority of people own their own cars and carry liability coverage, which is required by all states, then it's a moot point for most people. But for New Yorkers and others who don't have car insurance or liability insurance through our home owner's policy, it seems to me that DivineMissM is correct, at least with regard to California.

Frankly, I'm also surprised and baffled by this, but it does seem to be the law. And it's a law I've never heard of. (The last time I edited a book on a California destination, the laws in California were no different than in the rest of the country, but they do seem to have changed.) I'd be interested to know if this is California-specific because I've never heard of this issue before today.

Yes - it could very well be that California requires renters of cars to carry liability insurance - just as they do for individual owners of cars. But whether California exempts companies that rent cars from carrying liability - is a different question. It is very hard for me to imagine that they have such a statute since both those who rent the cars and those who have been involved in an accident where damage is caused by a rental car could very well have a very legitimate case for action against the rental company - e.g. a mechanical defect.

jroth, sorry I haven't been online since I last responded. And I'm glad that you posted again after discussing this with your insurance agent.

It is really important that people discuss this type of situation with their own insurance agents for many reasons but the most important, IMHO, are:

1) That they don't misinterpret the language in their insurance policies (which are legal contracts) and find out after a claim that the policy didn't respond as they thought it would, or even at all;

2) Especially with contracts such as "umbrella liability" or "personal excess liability", there are requirements of coverage needed in order that there isn't a lack or a gap in coverage. Briefly, these policies cover over and/or beyond the *stated* underlying policies' liability coverage (think of a symbolic umbrella, hence the name). But if you don't have any underlying liability for a specific exposure (such as the OP's not having an automobile policy) or if the coverage doesn't have high enough limits to meet the requirements of the policy, what happens then? And how can you get it? Although it is more common nowadays, having an umbrella liability or personal excess liability policy normally confers that the policyholder has assets to protect - so just make sure you are protecting them!

3) Your personal insurance agent has the information on your other coverages and how they may be affected by this situation. As I stated above, insurance policy contracts are written differently with different companies and may have different requirements; and

4) If you are going to several states (states themselves have differing liability laws) and/or a foreign country, even one which is adjacent to the U.S., such as Canada or Mexico, call your automobile insurance agent ASAP. You'll also have to get the OK through the rental car agency in which states you can use the vehicle, even if you aren't purchasing their liability insurance coverage. Many rental car companies don't allow travel in all states, even neighboring ones.

Also, RE: the credit card you are using to get that insurance through the rental car agency and how that rental contract is written. These both *also* could have negative consequences if they are done incorrectly.

P.S. I see several comments by posters above about renters and/or homeowners policies possibly covering automobile liability. If you think so, go to your policy and look under the "exclusions" portion. If you still think so, call your insurance agent immediately to discuss this. Homeowners and/or renter's liability coverages are completely different than automobile liability coverages. As a matter of fact, automobile liability coverage is different than many other types of motor vehicles liability - such as motorhomes, motorycles, dune buggies and so forth. And perhaps even moving vans, depending on the policy language.

If any of you are even contemplating renting any of these types of vehicles, please, please *check with your insurance agent first*.

Exiled - again many thanks for further exploration of this issue. And - you are absolutely correct in noting that many insurance policy holders are really not aware of what is actually covered and under what conditions and only find out (sometimes to their chagrin) when a claim is presented. Interestingly - just recently there was a news report (and I forget which state was involved) about a state now requiring insurance underwriters to write their policies ( I think these were health insurance policies)in "plain" English. A number of example were given in the article about how policies were presently worded ( legal gobbledegook) and how they would have to be worded in the future.

Here's what I found on the car agency websites:

Most Alamo locations provide either secondary liability or no liability protection from claims by others against you resulting from an accident in your rental car. Some locations provide primary protection under the Rental Agreement; however, this protection is limited to the minimum financial responsibility required by state law.

For California :
Hertz provides no liability protection under the terms of the Rental Agreement to the renter from claims of injury by others against you resulting from an accident. Your personal/business insurance may cover your liability.

I have just been looking at excess insurance for St. Maarten. You cannot get coverage there by the rental companies on the island. I found an AIG policy that has worldwide coverage options. Policy for 12 months is just over $100 for excess. they offer options for CDW and SLI as well. Website is insurance4carhire.com. Hope this is helpful.

The difference is that collision insurance has a very limited risk - while liability leaves the insurance company open to huge settlements. (We carry insurance of $500,000 - $1 million for that reason, but it doesn;t cost that much since our driving records are perfectly clean.) And since credit cards companies have no info on your driving record - or lack thereof - that would be a huge risk for them to take.

Credit card companies are now providing collision insurance with certain categories of their credit cards. I would have thought that they could come up with an option to purchase liability also - and they would be entitled to a reasonable charge and I believe they can come up with statistical formula for determining the cost of that risk. With current electronic technology they should also be able to charge just for those occasions when you rent and want that coverage.

I was in an accident in my rental car last year in New York City. I paid out of pocket to the car I hit (parked - 800.00 in body damage) and filed a claim with American Express platinum. During that process they explained to me that they had rental insurance as described I think by JR. Every time I rent - it will charge me around 20.00 or so - and it does provide full coverage. This is different then the insurance offered by the Platinum card. There is an issue with the loss of use that I am still dealing with (Hertz had it at around 700.00 or so).

doesn't secondary liability default to primary if there is no primary?

Just following up as I see this was topped - my accident ended up costing me close to 600.00 to be paid to Hertz - this was almost all for "loss of use" which is illegal if the accident occurs in certain states (in California for example they cannot charge you for loss of use) - so I am glad we got the additional insurance now via Amex or the 20.00 or so every time we rent. Well worth it. Our platinum card did cover around 800.00 in the damages - so it did help!

wakipaki:
No, it's the collision insurance that defaults. If you carry your own collision insurance that covers you in a rental car, your "credit card collision coverage" doesn't kick in except for what your primary insurer doesn't pay.

I haven't read every post, but advise getting the minimum insurance from the car rental company.

I've had two situations happen which has turned me into an insurance purchaser.

My habit was never to pay for any insurance offered by the car rental company. However, on two occasions, OTHERS scratched/dented my rental car. On the first occasion, the cost of repairs was $750, the second time it was $500. They were just scratches, but lots of times, people just like to scratch up a new car that's parked.

That's a total of $1,250 in repair bills. How many times would that amount cover rental insurance? Calculated at $20 each day, that's 62.5 days. How many days in a year do you rent a car?

I figured it was cheaper to pay the minimum of the rental car insurance than to go through the hassle of settling accounts - all those lost hours spent on the phone trying to straighten things out.

Just one person's experience and advice.

There is no doubt you should carry collision damage insurance when renting a car. I get that coverage via my credit card - but I was wondering about liability insurance which would be damage caused to another vehicle or person. Since I no longer own a car I don't have that coverage any more. You can buy it from the rental company - but I think their charge is exorbitant so wonder if there is any other avenue for coverage.

IMHO the liability coverage offered by the rental companies isn't exorbitant given the potential for claims. If you're in a serious accident and total another (expensive) car and there are significant injuries to persons in that car the cost can easily be hundreds of thousands of dollars.

I have my own coverage - raised to $1 Million based on the advice of our agent (there are a lot of expensive cars here and people have a way of developing life-long back or neck injuries). If you are judgement proof (have no significant assets) then it's not so much of a problem - since there is nothing that can be taken from you. But - if you own a home who would want to risk losing it rather than give $10 a day to the rental agency.

I've heard that it depends on the state where you're renting. Some states require that the auto rental company have liability insurance, others say it's all up to the renter. In California, unless something has changed recently, the auto rental companies aren't required to have liability insurance.

In case -- the thread is a year o0ld. It was topped by someone advertising a website

Not that new info isn't interesting/valid -- just that the OP probably isn't still looking for advice.

""ex·or·bi·tant   /ɪgˈzɔrbɪtənt/ Show Spelled[ig-zawr-bi-tuhnt]

–adjective

exceeding the bounds of custom, propriety, or reason, esp. in amount or extent; highly excessive: to charge an exorbitant price; exorbitant luxury.""


@ $11.95 per day??? Really ???