What Happens After a Rental Car Crash? [Michigan]

If you’re involved in a crash while driving a rental car in Michigan, determining which insurance policy applies is not always straightforward. Understanding how Michigan’s no-fault system applies to rental vehicles can help you know what to expect after a crash.

Who Pays for Medical Bills After a Rental Car Crash?

Under MCL 500.3114(2), a person injured while operating or riding as a passenger in a motor vehicle operated in the business of transporting passengers receives PIP benefits from the insurer of that motor vehicle. Rental vehicles operated for personal transportation, however, follow a different priority order. Under MCL 500.3114(1), PIP benefits generally come first from your own auto insurance policy — not from the rental company’s coverage.

This means that if you are injured in a crash while driving a rental car, your own Michigan no-fault policy is typically the primary source of PIP benefits for your medical expenses and wage loss, regardless of who caused the crash.

If you do not have your own Michigan no-fault policy, coverage may be available through a resident relative’s policy. If no applicable policy exists, Michigan’s Assigned Claims Plan under MCL 500.3172 may provide a pathway to benefits.

What Insurance Rental Companies Must Carry

Under Michigan law, some rental car companies may qualify as self-insured rather than carrying traditional no-fault insurance policies on every vehicle in their fleet. Because of that, determining which insurance applies after a rental car crash can be more complicated than many drivers expect. The applicable coverage depends on the specific facts of the crash and the insurance policies involved.

Rental Company Coverage and Credit Card Benefits

Rental companies typically offer collision damage waivers (CDW) or loss damage waivers (LDW) at the counter. These cover damage to the rental vehicle itself and are not the same as liability insurance. Separately, some personal credit cards provide secondary rental car coverage when you pay for the rental with that card — but the terms and exclusions vary significantly by card. Neither replaces your Michigan no-fault coverage or determines who pays your medical expenses after a crash.

Who Pays for Damage to the Rental Vehicle?

Michigan’s no-fault system does not pay for damage to your own vehicle in a crash — this applies equally to rental vehicles. According to the Michigan DIFS purchasing guide, collision coverage pays for repairs to your car when damaged in a crash. Whether your personal collision coverage extends to rental vehicles depends on the specific terms of your policy. Review your declarations page or contact your insurer before declining the rental company’s CDW if you are unsure.

What to Do After a Rental Car Crash

Report the crash to the rental company immediately — most rental agreements require prompt notification. File a police report. Notify your own insurance company. Before providing a recorded statement to an insurance company after a serious crash, consider speaking with an attorney about your rights.

If you were injured in a crash involving a rental vehicle in Macomb, Wayne, or Oakland County, our team may be able to help identify what coverage applies and evaluate what legal options may be available. To speak with a Michigan personal injury attorney, contact us today.