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In October 2024, a Melbourne man was slugged with a $15,000 repair bill after hitting a kangaroo in a rental car during a holiday trip.
According to a Herald Sun report, Mark Jensen was driving an MG SUV hired from a local car hire company when the incident occurred on the Sunshine Coast.
Jensen reportedly paid more than $5000 to fix the damage to the vehicle but received another invoice “demanding a further $10,000”.
“For me. I think [I was] very misled at the time of collecting the car. [As] it turns out it’s only if you have an accident in a very certain condition, otherwise, you’re going to pay their top tier items which to me is extortion,” Jensen told the Herald Sun.
Despite his claims, a spokesperson for the rental company said the terms and conditions encapsulating “inclusions and exclusions” are sent to customers ahead of their collection time and are additionally stated once customers have arrived to collect their vehicle.
So, it begs the question, who pays for the damages on a hire car after an accident? Here’s what you need to know.
What happens if you get into a car accident in a rental car?
Following the safety check of vehicle occupants, it’s important to take photos of the damage to any vehicles involved in the collision.
Once the involved drivers have exchanged details, the motorist with the rental car is advised to contact the hire company to determine the next steps.
“In the event of a car accident, Europcar customers can contact the closest Europcar location, or Europcar Roadside Assistance, which is available 24 hours a day, seven days a week,” a Europcar spokesperson told Drive.
“The provider will be able to determine if the vehicle is driveable, or if towing is required, and advise customers of the next steps,” they added.
Who pays for the damages to a rental car?
Generally speaking, third-party damage is covered by the at-fault driver, regardless of the car they were driving.
“In the case of a third-party accident, the driver at fault is responsible for any costs to repair the vehicle,” a Europcar spokesperson told Drive.
“If this is the Europcar customer, they will pay up to the excess amount at most, provided there is no breach of contract (for example, driving under the influence of drugs and alcohol).
“If the repair cost is less than the excess payable, the customer will only need to pay for the repair amount. Europcar also offers a comprehensive range of protection plans that allow customers to reduce their excess of an additional cost,” they added.
Since various rental companies have their own terms and conditions, some might offer full liability coverage in the event of an accident.
Global car rental giant Hertz said customers who purchase its Loss Damage Waiver (LDW) “will not be held responsible for any loss or damage that occurs to the car so long as you weren’t using the car in a prohibited manner”.
“Without LDW, you’ll be responsible for any loss or damage to the car including, but not limited to theft, vandalism [and] collision, regardless of fault,” Hertz stated.
However, depending on the at-fault driver’s personal insurance coverage, their private policy might cover the damages sustained to the rental car.
An Allianz Insurance spokesperson told Drive, “Under Allianz Comprehensive Car Insurance if a customer was driving their own insured vehicle and damages a rental car driven by someone else, the policy will still provide cover for both their own car as well as the rental car”.
“If the customer is at fault for the accident in this scenario, the relevant policy excesses will apply,” they said.
Additionally, Allianz customers who are driving a rental car due to their vehicle “being repaired, serviced or undriveable due to mechanical breakdown” are covered for “any damage to someone else’s car or property from an accident with the substitute car where you are at fault”.
“If the rental car has been provided by Allianz as a result of a claim, you will also receive up to $2000 for any applicable insurance excess or bond to cover the rental car,” an Allianz Insurance spokesperson told Drive.
According to the NSW Government, it's important to read the fine print of a rental agreement as some rental companies will only offer specific insurance coverage on certain conditions.
“Sometimes the rental agreement has terms and conditions that can limit your cover in certain circumstances, such as when the car is being driven by someone not on the rental agreement or if you admit you were at fault in an accident,” Legal Aid NSW advised.
What happens if a rental car is deemed a write-off?
Depending on the car rental company, at-fault drivers who have written off a hire car in an accident may only need to pay the excess amount of the damage coverage stipulated in the rental agreement.
“In the case of a write-off, if the Europcar customer was deemed at fault and there is no breach of contract, then they are only liable to pay the excess amount per the damage cover policy they booked. This does not involve the driver’s own insurance [policy],” a Europcar spokesperson told Drive.
Similarly, an Allianz Insurance spokesperson confirmed an at-fault driver's normal excess policy will apply if a rental car is deemed a write-off.
Ethan Cardinal graduated with a Journalism degree in 2020 from La Trobe University and has been working in the fashion industry as a freelance writer prior to joining Drive in 2023. Ethan greatly enjoys investigating and reporting on the cross sections between automotive, lifestyle and culture. Ethan relishes the opportunity to explore how deep cars are intertwined within different industries and how they could affect both casual readers and car enthusiasts.
