Hit by a Driver in a Rental Car? Here’s How Insurance Works in a Texas Car Accident
Being hit by a driver in a rental car can make an already stressful situation even more confusing. Who pays for your damages? Does the rental company’s insurance apply? Can you sue the rental company? And what if the driver didn’t buy the rental coverage at all?
Here’s the truth: rental car accidents involve multiple possible insurance layers, and Texas law has specific rules about who is responsible. Below is a clear breakdown so you understand exactly what happens and what coverage may apply.
1. The Rental Vehicle Is Usually the Primary Insurance in Texas
In Texas, insurance typically follows the vehicle, not the driver.
So when someone rents a vehicle, the rental car itself usually has a primary policy attached to it. This coverage can come from two sources:
The renter’s personal auto insurance, if their policy extends to rental vehicles
The rental company’s insurance, if the renter purchased it (often called LDW, SLI, or supplemental liability coverage)
Most rental companies require the driver to show proof of insurance or buy coverage. But the insurance that applies will depend entirely on the contract and policy language.
2. You Usually Don’t Know It Was a Rental Car Until You Get the Police Report
When you’re hit on the road, the other driver rarely volunteers:
“By the way, this is a rental car!”
You normally won’t discover it until:
You receive the police crash report,
Or you file a claim and the adjuster tells you,
Or you file a lawsuit and insurance disclosures reveal it.
Once you find out, the next step is determining which insurance policy applies first.
3. There May Be Multiple Insurance Policies You Can Make a Claim Against
If the at-fault driver was in a rental car, you may be able to pursue several layers of insurance, depending on the facts:
Layer 1 – Rental Company’s Insurance (if purchased)
If the driver bought supplemental liability insurance (SLI), that policy can provide primary liability coverage.
Layer 2 – Driver’s Personal Auto Insurance
If the renter elected NOT to buy insurance, their own personal auto liability policy usually applies — as long as the renter was a permitted driver under the policy.
Layer 3 – Your Own Coverage (UM/UIM or PIP)
If coverage is denied or insufficient, you may use:
Uninsured/Underinsured motorist coverage (UM/UIM)
Personal Injury Protection (PIP)
MedPay (if applicable)
Rental car claims often involve a coverage investigation, so it’s normal for insurance companies to delay or request extra documents.
4. Policy Language Matters — Every Case Is Different
One of the biggest issues in rental-car accident cases is policy interpretation.
Two different people can rent the same exact car from the same exact company and still have completely different coverage based on:
Whether they purchased the protection plan
Whether their personal policy covers rentals
Whether the rental agreement restricts drivers
Whether they violated rental terms (like unauthorized drivers, DUI, etc.)
This is why injury victims often need an attorney to:
Request all policies
Review exclusions
Determine which policy is primary
Identify additional coverage
5. Can You Sue the Rental Car Company? Usually, No — Because of the Graves Amendment.
There is a federal law that protects rental car companies from being sued just because they rented a vehicle to someone who caused an accident.
This law is called the Graves Amendment.
Under the Graves Amendment, rental car companies cannot be held liable for a renter’s negligence unless:
The rental company was independently negligent
(Example: renting out a car they knew had bad brakes), orThey violated a state law regarding vehicle maintenance or licensing.
This means:
You cannot sue Hertz, Enterprise, or Budget simply because their car was involved.
The claim is almost always against:
The renter’s insurance
The rental company’s optional insurance
Your UM/UIM or PIP coverage
6. What To Do After Being Hit by a Rental Car in Texas
Here’s what you should do immediately:
Call the police and request a report
Take photos of the vehicles, scene, and injuries
Get the driver’s ID and insurance info (even if it’s a rental)
Seek medical attention immediately
Notify your own insurance company
Have a lawyer request policy disclosures
Rental car claims often take longer because there may be multiple insurance companies pointing fingers at each other. A lawyer forces them to cooperate and identify which policy is responsible.
