Legal Rights of Rental Car Accident Victims

When you’re a victim of a car crash in a vehicle you rented, your legal rights depend on who caused the crash, each driver’s insurance, and Arizona liability laws. Considering that more than forty-five million people visited Arizona in 2023, it’s not hard to imagine an accident involving a rental is something you may have to deal with someday.

Facing the financial and physical aftermath of a car accident can be challenging, but knowing your rights (and getting advice from a top car accident attorney in Phoenix) can mean the difference between an easy recovery and paying costs that should never have been your responsibility.

Understanding Liability

Arizona is an at-fault state. This means that the driver who caused the crash (you, another driver, or a third party) is usually responsible for damages. When it comes to coverage however, accidents involving rental cars can be more complicated because of overlapping insurance policies.

If you aren’t responsible for the accident, the other party’s insurance should cover your injuries and property damage, including damage to the car you rented. If the at-fault driver is uninsured or underinsured, your coverage can become critical.

Arizona requires a person have insurance sufficient to cover $25,000 bodily injury and $15,000 property damage, but bad accidents and severe medical recovery can quickly exceed these minimums. High damage costs can be an insurance coverage issue for rental car accidents.

Rental Car Insurance Laws Explained

Arizona rental car insurance laws determine how coverage applies when you’re involved in an accident while driving a rental vehicle. Understanding these rules is essential because multiple policies may apply at the same time, and knowing which one pays first can significantly impact your financial responsibility.

Under Arizona law, all drivers (including those renting vehicles) must carry minimum liability insurance of:

• $25,000 for bodily injury per person
• $50,000 for bodily injury per accident
• $15,000 for property damage

Rental car companies are required to provide at least these minimum liability limits. However, this coverage is often secondary, meaning it may only apply after your personal auto insurance policy has been exhausted.

In most cases:

• Your personal auto insurance is primary (if you have a policy)
• Rental company liability coverage acts as secondary or supplemental
• Optional protections (CDW/LDW) apply specifically to the rental vehicle, not liability for injuries

Arizona also follows a fault-based system, meaning the at-fault driver’s insurance is responsible for covering damages. However, in rental scenarios, determining which policy applies (and in what order) can become complex, especially when multiple drivers or policies are involved.

Because of these overlapping layers, accident victims often face disputes between insurers about who pays first. This is where understanding Arizona rental car insurance laws, and having legal guidance, can make a significant difference in protecting your financial recovery.

Rental Car Insurance

Car rental companies are required to provide the Arizona minimum coverage to renters. However, there is a range of additional insurance options most companies offer. These can include:

• Collision Damage Waiver (CDW): Covers damage to the rental vehicle
• Loss Damage Waiver (LDW): Covers vandalism and theft
• Liability: Covers damages you may cause with the rented vehicle
• Personal Accident Insurance: Covers injuries to you and your passengers while you’re driving
• Personal Effects Coverage: Covers theft of personal items

These policies are above and beyond the Arizona minimum and can be worth getting for extra security. After an accident, a lawyer can help you identify insurance overlaps, making sure no potential compensation or financial protection is overlooked.

What Coverage Applies in Rental Car Accidents? (Primary Versus Secondary Insurance)

One of the most confusing aspects of Arizona rental car insurance laws is how different types of coverage interact after an accident. Not all policies serve the same purpose, and misunderstanding them can lead to unexpected out-of-pocket costs.

• Primary insurance pays first after an accident
• Secondary insurance only kicks in after primary limits are reached

In rental car situations, your personal auto insurance policy is typically primary, covering liability for injuries and property damage. If your policy limits are exceeded, additional coverage sources may apply.

Rental Company Coverage Versus Optional Add-Ons

Rental companies offer several optional products, but they do not all function the same way:

• Liability Coverage: Covers injuries or damage you cause to others
• Collision Damage Waiver (CDW)/Loss Damage Waiver (LDW): Covers damage to the rental vehicle itself, not third-party injuries
• Personal Accident Insurance (PAI): Covers medical expenses for you and passengers
• Personal Effects Coverage (PEC): Covers stolen belongings inside the rental

A key distinction is that CDW/LDW protects the rental car, while liability coverage protects you from claims made by others.

Credit Card Coverage: What It Does (and Doesn’t) Do

Many renters rely on credit cards for protection, but this coverage is often misunderstood:

• Typically secondary coverage only
• Usually covers damage to the rental vehicle, not liability
• May exclude certain vehicle types or rental durations

Uninsured and Underinsured Driver Scenarios

If the at-fault driver lacks sufficient insurance, your uninsured/underinsured motorist (UM/UIM) coverage may apply. This can be critical in Arizona, where minimum coverage limits are often too low to fully cover serious injuries.

Comparative Fault

Arizona uses pure comparative fault laws, meaning that liability is tied to each party’s degree of responsibility. For example, if you were in an accident that caused $100,000 in damages and are found to have been 20% responsible, you could still recover $80,000. 

This is important in accidents where liability isn’t cut and dry. For instance, an accident in which one driver was speeding and another ran a red light. 

This rule can also be used by insurance companies who are looking to reduce their payouts. They may attempt to increase the fault applied to a driver not covered by their policy so they can minimize their costs.

This is another reason it’s important to get an attorney on your side after you’ve been in an accident.

The Gage Mathers Solution

If you’re in an accident involving a rental car, the experts at Gage Mathers can help you navigate the aftermath. Our lawyers can sift through overlapping policies and make sure you only pay what you have to and are protected the way you deserve.

We’re also happy to provide insight into other issues for Arizona drivers. For example, don’t miss our latest article on the legal consequences for violating Move Over laws!

About the Author

Joseph D'Aguanno

Guided by the belief that being a highly skilled specialist in a narrow field is better than being ordinary in everything, Joseph “JD” D’Aguanno leads Arizona’s best personal injury law firm in Phoenix, AZ. Having extensive cross-training in pre-litigation negotiations and trial lawyer skills, with decades of experience, JD strives to provide clients with the most valuable legal services a personal injury lawyer can provide. Under his direction, Gage Mathers Law Group is an award-winning personal injury law firm providing aggressive representation to victims of a car accident, medical malpractice, dog bite, motorcycle accident, and other injurious events. Gage Mathers is trusted by thousands of lawyers and clients throughout the country because of their reputation for getting clients the maximum compensation they deserve.

Years of experience: Over 24 years
Bar number: 020421
Location: Phoenix, AZ
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