Who Pays for My Rental Car After an Accident? Know Your Rights

A car accident can be worrisome enough without the extra hassle of being left without transport. Whether your car is your primary mode of transportation for daily work, chores, or errands, losing it, even on a temporary basis, can throw your life out of routine. In those cases, car rental makes sense. But this brings about another critical question: Who funds a rental car following an accident?

Who Pays for a Rental Car After an Accident?

It doesn’t hurt to know your rights. While in certain Western nations, insurance for rentals tends to be simple, the Indian legal and insurance systems can be trickier. This blog will walk you through the main points: from third-party liability and insurance claims to how you may end up paying for it yourself. 

And being aware of your choices can save you time, money, and legal hassle, including being aware of who pays for hire car after accident.

1. Types of Car Insurance 

To know who pays for my rental car after an accident, you should first know the kinds of car insurance that are usually offered in India:

Third-Party Insurance: It is compulsory under Indian law and pays for injury or damage to a third party by your vehicle. But it does not pay for your own damages or the rental vehicle.

Comprehensive Insurance: Optional but very much worth it. This insurance pays for third-party damages and damage to your own car, theft, natural calamities, and in some cases, personal accident cover. Certain comprehensive policies have or permit add-ons of daily conveyance (including rental reimbursement).

If you have only third-party insurance, there’s not much hope of getting a rental car paid for. With a comprehensive policy, though, you might be able to get reimbursed, depending on the insurer and the policy.

2. Rental Car Reimbursement Through Your Own Policy

Certain Indian insurers provide a “Daily Allowance” or “Conveyance Benefit” as an add-on to the comprehensive car insurance. It pays for your travel expenses on a daily basis (sometimes through a hired vehicle) when your own vehicle is being repaired following an accident. 

It might not cover some vehicle types, such as luxury or commercial vehicles.

So, if you’ve chosen this add-on, and the accident falls within your policy, your insurer can pay for rental car costs up to the amounts set forth. You can then see who pays for hire car after accident in your policy and decide whether choosing a monthly car rental or car subscription is more practical during the waiting time.

3. If You’re Not the One to Blame: Claiming from the Other Party

Fault can be a significant factor. If another person was responsible for the accident, you can claim compensation—rental costs included—from their insurance company. The process, however, does not necessarily move fast or smoothly.

You will have to make a third-party claim under the Motor Accidents Claims Tribunal (MACT).

The legal process takes months, even years, and you have to establish fault on the part of the other party.

MACT awards will cover out-of-pocket losses, such as damage to the vehicle, medical expenses, and transportation expenses (rentals), but only if properly documented.

Meanwhile, if the at-fault driver does not voluntarily pay you back, you’ll probably end up paying for the rental yourself and getting reimbursement down the line. 

In the meantime, exploring alternatives such as car subscription or monthly car rental may ease your financial burden while you determine who pays for my rental car after an accident.

4. What If You’re at Fault?

If you have caused the accident and your vehicle is also damaged, then only a comprehensive policy with a conveyance add-on will pay towards the cost of hiring a car. Without this, you would have to arrange and pay for a hired car yourself.

In some cases, your insurer may assist with logistics or offer partnered rental services at discounted rates, but this is not an industry standard. It’s best to confirm this with your insurance provider to understand who pays for hire car after accident when you’re at fault.

5. When Neither Party Is Clearly at Fault

Sometimes, the blame isn’t clear-cut. In such scenarios:

Dashcam videos, police reports, and witness statements become important factors.

Insurers can share the responsibility or refuse liability until a decision is made.

You might be required to pay using your own money for a rental and then seek reimbursement for it from legal or insurance claims later on.

If you’re still confused, ask your insurance agent or a lawyer. Clarifying early avoids disputes and delay. Meanwhile, knowing how much the rental car costs me after an accident can assist you in determining whether to opt for a monthly car rental or consider short-term car subscription options.

6. What About Cashless Claims?

In cashless settlement of claims (commonly provided at network garages), your vehicle is repaired and you do not pay cash in advance. That does not include rental cars, except when under a conveyance add-on.

So, even with a cashless accident claim settlement, your own transport requirements during the interim are not taken care of automatically unless clearly covered. That leaves you wondering who pays hire car after accident if your policy does not have that feature.

7. Documentation Needed to Claim Rental Expenses

When determining who pays for a rental car after an accident, there’s a lot of paperwork that needs to be in order. If your policy or the at-fault party’s policy includes coverage for rental or conveyance, you’ll need solid documentation like FIR or police report, repair estimate and time frame from an authorized garage, rental car agreement/invoice, proof of payment (receipts) and proof of necessity (e.g., job requirement, medical appointments).

Without documentation, your claim for reimbursement can be denied or held up.

8. What If You’re Behind the Wheel of a Company Vehicle or Rental Car?

If the vehicle in the accident is a company-owned car:

• Your employer’s insurance policy will typically cover the claims.
• You may not be eligible for a separate rental unless the employer or insurer arranges it.

If you were driving the rented or leased vehicle, who pays for a rental car after an accident will be determined by the rental company’s insurance and terms. 

Mostly, they’ll charge you and then recover later based on liability. Either way, your agreement should cover off hire car after accident or what you’re covered off from if you require monthly car rental or car subscription.

Ways to Stay Informed and Safe:

• Always read the fine print in your policy.
• Think about adding rental/conveyance add-ons at the time of buying or renewing your comprehensive policy.
• Fit a dashcam to assist in proving liability during accidents.
• Ask your garage for a written repair timeline and estimate.
• Have all receipts and rental agreements in order and ready for lodging.

Before assuming your insurer will cover the costs, always check your policy details to see who pays for a rental car after an accident in your specific case. While some policies leave you to cover the costs up front, others include a conveyance or daily allowance. Find out if your claim involves third-party liability, as that can affect reimbursement timelines and responsibilities.