FSS Warns: "Check Compensation Eligibility Before Hastily Using a Rental Car After an Accident"

#Victim A used a rental car before sending the vehicle to a repair shop, following the recommendation of a private towing company employee at the accident scene. However, the insurance company refused to compensate for the rental fee incurred before the vehicle was admitted to the repair shop, stating that, according to the policy, rental car coverage only applies after the vehicle is brought into the repair shop. As a result, A had to pay the cost personally.

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According to the Financial Supervisory Service on February 3, victims of car accidents can either use a rental car during the repair period or receive a cash reimbursement equivalent to 35% of the rental fee as transportation expenses. However, there have been cases where, under psychological stress immediately after an accident, victims followed incorrect advice from third parties, such as private towing or rental companies, rather than the insurance company’s claims adjuster, used a rental car, and ultimately had to pay the costs themselves because they were not compensated.

In particular, some rental companies affiliated with private towing companies have been criticized for aggressively encouraging accident victims to use rental cars at the scene or falsely claiming that full compensation is possible even in cases of shared fault. According to the policy, the rental car coverage period is strictly limited to the time from when the damaged vehicle is admitted to the repair shop until the repair is completed. Rental fees incurred before the vehicle is brought into the repair shop are not eligible for compensation.

Additionally, depending on the degree of fault in the accident, victims may have to pay part of the rental or towing fees themselves. In cases of single-vehicle accidents or when repairs are not carried out, rental car compensation is not available at all. The Financial Supervisory Service explained that there are numerous cases where victims, unaware of these facts, use rental cars and end up bearing the entire cost after the accident is processed.

For example, victim B used a rental car on the recommendation of a repair shop employee while repairing a vehicle after a single-vehicle accident (sole fault). When B later claimed the rental fee from the insurance company, the insurer refused payment, stating that the “own vehicle damage” coverage only compensates for repair costs and does not cover rental fees.

The Financial Supervisory Service emphasized that there is no need to decide immediately at the accident scene whether to use a rental car, and if there is any uncertainty about compensation eligibility, victims should always consult with the insurance company’s claims adjuster before making a decision.

Furthermore, to prevent consumer harm, the Financial Supervisory Service announced that it has prepared a “standard rental car compensation guide” requiring insurance companies to immediately inform victims of the rental car compensation criteria when a car accident is reported. The agency plans to continuously monitor compliance with this guidance in cooperation with insurance company claims departments going forward.

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