Before I answer, “Do I need my own insurance when renting a car or using a car-sharing service?”, let me first explain the difference between traditional car rental agencies and car-sharing services. Most of us have heard of the major car rental agencies – Enterprise, Hertz, and Avis. However, I suspect not too many people are aware of car-sharing companies. For example, have you ever heard of Flexcar, Zipcar, Getaround, or Turo? Basically, either type of company allows a driver to rent a vehicle but there are a few differences. Car-sharing services generally provide convenient and flexible access to vehicles for short-term usage to its members. Cars can be used for only a few hours or to run an errand. Car-sharing services are especially popular in urban areas where it is expensive to keep your own vehicle. On the other hand, traditional car rental companies are used for longer-term needs such as vacations or business trips. Plus, membership is not required to rent a car.
According to their marketing materials and contracts, car-sharing companies claim to provide insurance as part of the rental fee. And traditional car rentals may include basic insurance coverage and most all offer additional coverage for an extra cost. What really matters is the amount of risk that you are willing to take. As a personal injury lawyer, I suggest taking as little risk as possible.
Why do I say this? Because the insurance coverage provided may not be adequate in the event you get injured in an accident. The same holds true if you are at fault and injure another person or persons.
For example, I recently came across a copy of Flexcar’s Legacy Subscriber Agreement. The agreement states:
The Flexcar Insurance provides third party bodily injury coverage in the amount of up to $25,000 per person and up to $50,000 per accident, and property damage coverage in the amount of up to $25,000. If a higher level of coverage is mandated by law in the jurisdiction where the accident occurs, then the limits of such protection will be the minimum financial responsibility limits required by law in such jurisdiction.
The above levels of insurance, which are in line with Georgia’s legal requirements, may seem sufficient. But, trust me, it will not be enough to cover serious injuries or property damage.
Flexcar’s agreement also states:
If, however, a Subscriber fails to abide by the terms and conditions of this Agreement, including providing all reasonable assistance to Flexcar in the event of any incident, the third party liability coverage Flexcar provides may not apply, which may make the Subscriber responsible for the full cost of any accident or incident and any damage arising from such accident or incident.
Let that sink in for a moment. The agreement is a lengthy and complex legal document. Therefore, a novice may not understand the agreement’s implications or their obligations under it. Thus, an innocent error may cause the renter to lose all coverage.
Another portion of Flexcar’s agreement says:
Where permitted by law, you are rejecting uninsured or underinsured motorist and all optional automobile insurance coverages and under any policy of insurance or certificate of self-insurance in connection with this Agreement, for you and all other passengers in the car, and each Subscriber agrees that Flexcar is hereby authorized to sign any forms or acknowledgements on behalf of each Subscriber rejecting such coverage.
Well, as a I wrote in a previous blog, Georgia law does NOT require uninsured motorist coverage. Thus, if you were to get injured by a negligent driver who has low policy limits or no insurance at all, you would have no coverage under Flexcar’s insurance. This could create a huge burden on you and your family.
Before renting a car, either through the traditional way or through a car-sharing service, it’s crucial to carefully review the terms and conditions of the rental agreement, especially the insurance coverage details. You need to make sure you have adequate coverage in the three main areas of auto insurance: Liability (bodily injury and property damage), Physical Damage (collision and comprehensive), and Uninsured Motorist.
If you have existing auto insurance, review your policy, and contact your insurance provider to see if your policy extends coverage to rental cars. Do this before signing any agreements.
If you do not have your own insurance, buy the additional insurance offered by the rental company – if they offer it. If not, you may want to consider purchasing a non-owner car insurance policy to provide coverage when using rental cars or car-sharing services.
No, you don’t necessarily need your own insurance, but I strongly recommend that you get as much coverage as possible. Afterall, car accidents happen and can have a devastating impact on your life whether you are the victim or are at fault. Not only do people experience life-altering injuries, but they can also face financial hardship from which they may be unable to recover. For these reasons, auto insurance is critically important and is the only tool that can really protect you.
Bryan Baer, principal and founding partner of The Baer Law Firm, has over 20 years of experience litigating catastrophic injury and medical malpractice cases. He has recovered millions of dollars in compensation for his clients, earning his membership in the Million Dollar Advocates Forum. Bryan has earned a Super Lawyer designation since 2016 as well as Georgia Trends Legal Elite. He has also received a Top 40 Under 40 designation from The National Trial Lawyers in 2014 and is one of America’s Top 100 High Stakes Litigators.