Rental Car Insurance after Auto Accident
Insurance companies are always looking for ways to shave a few dollars from the cost of a claim, and reimbursements for rental car insurance costs often are the first to meet the blade. Insurance companies often tell accident victims that they pay only a certain amount per day for rental cars. As a victim of another person’s negligence, you have the right to recoup the costs associated with fixing the disruption you experience, including all of the costs of renting a vehicle while your own vehicle is unusable. If you rent reasonably and the insurer insists on cutting the amount of its reimbursement, ask the insurer to put its reason in writing. Insurers must inform you in writing of their decisions to deny or reduce payments.
Insurance companies oftentimes do their best to keep claims to a minimum. One example of this is when the at-fault driver’s insurance carrier provides you with a rental car with a “take it or leave it” attitude.
For example in California, you are entitled to be provided with a vehicle of equal value to the vehicle that was damaged as a result of another driver’s negligence. For example, let’s say that you get rear-ended in your new Toyota Prius. The other person’s insurance company says “yep, our driver was at fault” and then allows you $20 a day for rental car. Well, an equivalent Prius may rent for $50 a day.
You are entitled to rent a $50-a-day car and have the other party’s insurance company pay for it (subject to, among other things, his or her property damage policy limits). Period.
Now, let’s change that scenario a bit: For whatever reason, you don’t want to rent a car during the time that your car is in the shop. You’re entitled to make that choice. Let’s take it one step further: Your car is in the shop for six weeks (42 days). You will be entitled to $2,100 in real dollars to compensate you for the time that your car is in the shop. In other words, you do not have to actually rent the car in order to be compensated for your loss of use.
OR what if you rent a car for $25 a day? You’ll be entitled to the difference in cash (well, in check). So, you rent a car for 42 days at $25 a day for $1,050 but you were entitled to a car renting for $50 a day. The insurance company should pay you the difference of $1,050 in the form of real dollars.
Here’s the law (CACI 3903M)