When we arrived in San Francisco on Thursday, I rented a car. It was the first time I’d ever done so — we’ve never used one on vacation, and this was my first business trip. The whole car rental thing was a mystery to me.

When the man at the rental counter asked me what sort of insurance I wanted to purchase, I told him I had my own. In truth, I had forgotten to research my coverage. I was placing faith in what I’d read many times before — that car rentals are generally covered by your own auto insurance and by your credit card.

On Saturday we drove to Berkeley. Kris took me to a nice restaurant for my birthday lunch, and I made a stop at a comic book store. (Where I bought nothing, by the way — I’ve come a long way!) We were driving back on University Avenue, stopped at an intersection, when a car slammed into us from behind.

My first thought wasn’t about the safety of those in the accident, but about how I hadn’t purchased the rental company’s insurance. I got out of the car and walked back to talk to the other driver, a Hispanic man about my age. “Are you okay?” I asked. He was. “Do you have insurance?” I asked. He did not.

We pulled onto a side street. While he called his wife, I phoned the Berkeley police. I had no idea what to do in the situation, but I figured I had to file an accident report to have any hope of settling with rental company.

As we waited for the police to arrive, I tried to convince the other driver to exchange information with me. He was reluctant to do so. Eventually he gave his name as José Hernandez. “I can just pay you cash,” said José.

“I can’t do that,” I said. “Maybe if it was my own car, but it’s not.” His English was fairly good, but he couldn’t seem to understand that the car was a rental, and that we were only visiting from out of town. Together, we looked at the damage to the vehicles. The rear bumper of my car was destroyed, but everything else seemed fine. The front end of his vehicle was scrunched, but the damage was entirely cosmetic.

I felt bad. I knew that by reporting the accident, the relative financial consequences for José would probably be far more severe than they would be for me if I didn’t report it. He might lose his job (he was driving to work when the accident occurred), he was likely to be fined, and if he were in the U.S. illegally, he might even be deported. By reporting the accident, I might be ruining his life. If I didn’t report it, all that would happen to me is that my emergency fund would be drained.

The three police officers who arrived on the scene grasped the situation immediately. When I expressed my concerns, one of them nodded and said, “Yeah, it’s tough, but you had to make the call. If you were in your own car, I can see trying to take care of it privately. But you’re in a rental. You had to do this.”

Did I? Leaving aside all the things that José was doing wrong — driving without a license or insurance, rear-ending somebody, possibly being in the U.S. illegally — was my own decision the right one? In the heat of the moment, I acted almost instinctively to protect myself. In retrospect I wonder if there were better options.

When we got back to the hotel, I called my insurance company. The rental is covered under my policy. From what I can tell, the $250 deductible will even be reimbursed by my credit card company. In theory, all this minor accident will cost me is a couple hours of my time. But it’s going to cost José much more.

Image by Incase Designs, and is not our accident.

This article is about Cars, Choices, Insurance, Real-Life  Monday, 31st March 2008 (by J.D. Roth)