Who is liable for an accident when the driver is driving a rental car?

The driver who caused the accident is primarily liable for the damage. In practice, however, most claims by victims are covered by the insurance company under the vehicle’s compulsory liability policy. The vehicle operator may be liable, for example, if the damage exceeds the insurance limit or if the insurer reclaims against the driver.

Can an insurance company demand money from a driver who caused an accident?

Yes. The insurance company can make a so-called recourse claim. This most often happens when the driver caused an accident while under the influence of alcohol or drugs, was driving without a licence or was using the vehicle illegally.

Who pays for damage to a rental car?

Damage to your own vehicle is not usually covered by third party insurance. If the car has breakdown insurance, the insurance company may pay for the damage from this insurance. Otherwise, the owner can claim compensation from the driver who caused the accident.

Is the car owner liable for radar fines?

Yes, in some cases a fine can be imposed on the vehicle operator. If no specific driver is identified, the administrative authority may impose a fine on the operator of the vehicle under the rules of strict liability.

What if the damage from a car accident exceeds the limit of the compulsory liability insurance?

If the damage exceeds the insurance limit agreed in the compulsory liability policy, the person responsible for the damage must pay the difference. In practice, this is most often the driver who caused the accident.

Is it better to have a written agreement when renting a car?

Yes. A short written agreement can avoid disputes over who will bear the cost of car repairs, deductibles on collision insurance, or any fines.

How do I rent, borrow or lease a car?

How we resolved a leasing dispute after a car accident

In our practice we dealt with a client who had a car on operating lease and lent it to a friend. The latter caused a car accident in which the vehicle was significantly damaged. Although the insurance company paid part of the damage under the at-fault party’s compulsory liability policy, the leasing company demanded that our client pay the residual value of the vehicle as well as a penalty for breach of the lease terms.

The problem was that the lease agreement contained a provision that no one other than the person named in the agreement could drive the vehicle without the prior consent of the leasing company. The leasing company therefore claimed that the client had breached the contract and had to pay all costs.

However, after analysing the contract, we found that the driver restriction clause was ambiguously worded and the leasing company had interpreted it more strictly in practice than the contract text suggested. We also argued that the damages were already largely covered by insurance and that the required additional payment was unreasonable.

After legal negotiations with the leasing company, we finally managed to reach an agreement: the client paid only the deductible and part of the administrative costs, while the leasing company dropped its demand for the full balance of the vehicle’s residual value. Thus, the client paid only a fraction of this amount instead of the originally demanded several hundred thousand crowns.

Such situations are not exceptional – leasing contracts often contain provisions that can be very disadvantageous for the client in the event of a traffic accident. It is therefore worth checking the contract before signing or consulting a lawyer if a dispute has already arisen with the leasing company.