In the 'Rent A Car' sector, who pays for car damage depends on the terms of the rental agreement, insurance coverage, and how the damage occurred.
The Main Point: Rental Agreement and Insurance
When renting a car from any "Rent A Car" company, the first and most crucial step is to carefully read the rental agreement. This agreement precisely outlines all terms related to damage payment, including what the insurance coverage entails and in which cases you will be held liable.
In Azerbaijan, rental companies typically insure their vehicles with Compulsory Insurance (Civil Liability Insurance) and additionally with CASCO Insurance.
Compulsory Insurance: This insurance covers damage to the health or property of third parties resulting from a road accident for which the renter (you) are at fault. However, it does not cover damage to the rented vehicle itself.
CASCO Insurance: This is the most crucial type of insurance in "Rent A Car" agreements. CASCO covers damage to the rented vehicle (theft, fire, natural disaster, accident, etc.) regardless of who was at fault for the incident. However, CASCO insurance usually applies a "franchise" (deductible), meaning the customer pays a portion of the insurance claim. This implies that you will be required to pay a certain amount of the damage. The franchise amount is stated in the contract and typically varies depending on the category of the rented car.
Scenarios for Who Pays:
Accident Caused by You:
If you are at fault for the accident, and your rental agreement includes CASCO insurance, the damage to the vehicle will be covered by this insurance, but you will be responsible for paying the franchise amount.
If CASCO insurance is not in place or this risk is not covered in the agreement, you may be fully liable for all damage to the vehicle.
Accident Caused by Another Party:
In this case, as the injured party, the other driver's compulsory insurance should cover the damage to the rented car.
However, insurance procedures can take time. In some cases, the "Rent A Car" company might require you to pay the franchise amount and then reimburse you after receiving the insurance payout. In this situation, it's important to inform the company and ensure all documents (accident report, insurance claim) are properly prepared.
Unidentified Driver or Hit-and-Run:
In such situations, if you do not have CASCO insurance, getting the damage covered can be difficult, or full responsibility might fall on you.
If you have CASCO insurance, it may cover such incidents, but the franchise will still apply. It's crucial to report it to the police immediately.
Damage to a Parked Car:
If your car is damaged while parked and the person who caused the damage is known, their insurance will pay.
Otherwise, if you have CASCO insurance, it can help, but the franchise will apply. Be sure to report it to the police.
Natural Disasters (Flood, Earthquake, etc.):
In these cases, compulsory insurance does not cover the damage. The damage will only be covered if you have CASCO insurance and these risks are included in your contract, but the franchise will apply.
What Should You Do?
Read the Contract: Before renting, carefully review the contract, especially the insurance clauses and franchise terms.
Inspect the Car: When picking up the vehicle, document any existing scratches or damages (take photos/videos) and report them to the "Rent A Car" company representative. This will prevent disputes later on.
When an Incident Occurs: Immediately notify the "Rent A Car" company and the police. Gathering all documents (accident report, damage assessment, etc.) will speed up the process. Follow the company's instructions.
