Unauthorized Driver on a Rental Car: Penalties, Insurance Risks & How to Stay Protected

Renting a car gives you flexibility and convenience, but it also comes with clear rules one of the most important is who can legally drive the vehicle. If someone not listed on your rental agreement gets behind the wheel, they’re considered an unauthorized driver, and this can lead to serious consequences.

From hefty fines(“A substantial sum of money imposed as a penalty for violating a law or regulation”) and voided insurance coverage to full financial responsibility for any damage or accidents, the risks are high. Most rental companies strictly enforce this rule to limit liability and protect their fleet. To stay protected, always add every person who may drive to the agreement before taking the car.

It may cost a small additional driver fee, but it’s far cheaper than facing penalties or losing coverage. Understanding these terms helps you travel confidently and avoid unexpected trouble on the road.

Who Can Legally Drive a Rental Car?

When you rent a car, you’re required to provide the name of every person who will drive it. These individuals are called additional drivers, and they must be listed in the rental agreement. Only these approved drivers are covered under the contract and any included insurance policies.

Failing to list someone, even a family member or friend  makes them an unauthorized driver, which violates your rental contract. Once that happens, you become fully responsible for any accidents, damage, or legal issues caused by that person.

The Additional Driver Fee In the US

The Additional Driver Fee in car rental is an extra charge you pay if you want to add another person as a driver for the rental car besides yourself. Rental companies often charge this fee per day for each additional driver you add to the rental agreement.

It is important to note that not all rental companies have this fee, and the amount can vary between companies. This fee covers the additional risk and liability of having more than one person driving the rental car during the rental period.

General Additional Driver Fee in Top Companies

• Alamo- $10 daily (New York, $5)
• Avis- $13 daily 
• Budget- $13 daily ($65 maximum fee)
• Enterprise- $15 daily ($5 in New York)
• Hertz- $13.50 daily ($189 maximum)
• National- $12 daily

Penalty for Unauthorized Driver of a Rental Car

Allowing someone not listed in your rental agreement to drive the car can lead to heavy financial and legal consequences. Typical penalties include:

• Fines: $50 to $400 per day, depending on company policy and state law.
  
• Full Liability: You may be required to pay for all damages, injuries, or towing costs if an unauthorized driver causes an accident.
  
• Insurance Cancellation: Rental company insurance and your credit card coverage become invalid.
  
• Contract Termination: The company can cancel your rental immediately and report a contract violation.
  

Future Restrictions: Repeated violations can result in being blacklisted by the rental company.

Types of Penalties You Might Face

Fines: You might have to pay a fine if caught driving a rental car without permission. The fine amount depends on where you are and how long you have been driving the rental car. If you do it again within a short time, the fine might be higher.

Criminal Charges: In severe cases, driving a rental car without permission can lead to misdemeanor charges or community service.

Jail Time: If you are found guilty in many states, you might spend up to three months in jail or pay a big fine.

Driver’s License Suspension: Your driver’s license might be taken away if you do something really bad while driving, like breaking important rules or causing a big accident. This means you can’t drive anymore until they decide to give it back to you.

Insurance Complications with Unauthorized Drivers

If an unauthorized driver gets into an accident, the rental company might not cover the damages. That means you could be responsible for paying for repairs from your pocket. Your car insurance might not cover accidents or damages if an unauthorized driver drives your rental car.

Your insurance usually only covers specific drivers called additional drivers listed in the policy. It is important to understand this before renting a car from a car rental company. Check your insurance policy to see what it covers. If necessary, you can buy more insurance from the rental company to protect yourself in case of an unauthorized driver.

If the Unauthorized Driver Meets an Accident
Insurance coverage is one of the most serious issues with unauthorized driving. If the unauthorized person causes an accident:

• The rental company’s insurance (Collision Damage Waiver or Liability Insurance) becomes invalid.
  
• Your personal auto insurance may deny coverage because the driver was not authorized.
  
• You might have to pay all repair, medical, and legal costs out of pocket.
  

Always check your personal or credit card insurance policy to confirm if rental cars and additional drivers  are covered.

Is There Any Insurance Coverage for Unauthorized Drivers?

When you add someone to the rental contract, they get full insurance coverage. But remember, your car insurance only covers you, not others. If someone who is not on the rental contract drives the car, they are not covered by your insurance because they weren’t allowed to drive. This means your insurance might not protect your unauthorized drivers.

Check your car insurance policy to see if it covers them. Some policies do, but not all. Understand your policy to avoid unexpected situations, like if an unauthorized driver causes an accident.

If your insurance does not cover them, consider getting extra insurance from the rental company or exploring other insurance options.

Check Out Your Regular Car Insurance

When you rent a car, the car rental company might offer insurance, but it could cost extra and might not be necessary. Your regular car insurance might already cover rental cars, so you might not need the rental company’s insurance.

Before deciding, check your car insurance policy to see if it covers rental cars and accidents with unauthorized drivers. If it does, you can avoid the rental company’s insurance to save you money.

Insurance Limitations and Exclusions

Check your car insurance if it has some restrictions that might create problems for you in the future, such as not covering rental cars for business or exotic cars. Read your policy carefully to understand what is covered or what is not. If you often rent cars for business or exotic cars, consider getting special insurance.

Being smart and doing things in advance keeps you safe. Also, check the services for unauthorized drivers of rental cars whether the insurance policy covers them or not. 

Insurance Coverage

If there is an accident with an unauthorized driver, your insurance can cover it if you have that special insurance policy. This type of insurance might be costlier than the regular one.

Also, you might have to pay for damages beyond what your insurance covers. Before renting a car, review your insurance policy to understand what type of coverage you get in case of an accident.

Check Also Related Article: Do Tourists Need Additional Insurance?

How Rental Companies Identify Unauthorized Drivers

Rental companies have multiple ways to find out if someone unauthorized was driving:

• License verification: The company can match the driver’s license against the listed names.
  
• Police reports: Accident reports clearly state who was behind the wheel.
  
• Telematics & GPS data: Many modern rentals use GPS tracking, making it easy to confirm driver identity and usage.
  
• DMV Checks: They can verify if the listed driver was legally allowed to drive at the time.

How to Avoid Penalties for Unauthorized Drivers

The simplest solution to avoid such penalties is to follow all the care rental agreement rules with honesty. Only allow the additional drivers to drive your car rental not to any unauthorized.

If someone else needs to drive, you must add them to the agreement at the time of renting a car. It might cost a bit extra, but it is better than dealing with penalties later.

Also, to avoid penalty fees, do not get the rental company’s insurance. Use your car insurance. It might help cover costs if someone drives the rental car without permission.

Frequently Asked Questions

What is an unauthorized driver on a rental car?
An unauthorized driver is anyone who drives the rental vehicle but is not listed on the rental agreement as an approved/additional driver. The renter remains contractually responsible.

What penalties apply if an unauthorized driver causes an accident?
Penalties commonly include daily fines ($50–$400), voided rental insurance, and full liability for damage and medical costs — exact amounts depend on the rental company and state.

Will my personal car insurance cover an unauthorized driver?
Most personal policies only cover insured drivers listed on the policy; many insurers deny coverage if an unapproved driver caused the accident check your policy for exceptions.

Does rental company insurance cover unauthorized drivers?
Usually no  CDW/LDW or liability add-ons typically only apply to drivers listed on the rental agreement; an unauthorized driver can void coverage.

How can I add an additional driver to avoid penalties?
Add them at the rental counter or during booking, provide their driver’s license, and pay any additional driver fee; retain a copy of the updated contract.

What should I do if an unauthorized driver had an accident?
Call police, document the scene and IDs, notify the rental company immediately, and contact your insurer — do not admit fault on the spot.

Can I be criminally charged for letting an unauthorized person drive?
In some jurisdictions misuse of a rental vehicle can lead to fines or criminal charges if laws were broken; most common outcomes are civil and contractual penalties.

Does adding an additional driver cost extra?
Yes  many U.S. companies charge a per-day fee (varies by company and location); some waive fees for spouses or corporate renters.

Will unauthorized driving impact my ability to rent later?
Repeated violations can lead rental companies to blacklist you, refuse future rentals, or require larger deposits.

How do I prove a driver was authorized if disputed?
Keep a signed rental agreement naming additional drivers, receipts for added driver fees, and photos of the contract; these help resolve disputes.

Conclusion

Driving a rental car is convenient, but it comes with responsibility. Always ensure that only authorized drivers those listed in the rental agreement  are behind the wheel.

Ignoring this rule can cost you hundreds or even thousands of dollars in penalties, loss of coverage, and legal trouble.

Following the contract terms, adding legitimate drivers, and keeping your documents updated ensures a worry-free, smooth trip  and helps you stay protected from unnecessary risks.