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Florida rental car auto insurance coverage, what it really cover.

rental car auto insurance

Florida rental car auto insurance coverage, what it really cover.

Florida rental car auto insurance coverage is wider than you thought. You should read this given by the Insurance journal.

A Florida rental car customer’s auto insurer must cover crash injuries, even though the driver was someone not authorized under the rental car company’s contact.

In a 5-2 opinion on Nov. 23, the Florida Supreme Court overturned a district court ruling and reaffirmed its own earlier rulings that a rental car contract may not restrict the insured’s auto coverage.

The majority ruled in the Gadsden County case that the rental car was covered by Katusha Shazier’s insurance policy because the rental car was a “temporary substitute auto” and the accident occurred when the car was being driven by someone to whom she had given permission.

The justices rejected Geico Indemnity Co.’s argument that the rented auto no longer fell into the category of “temporary substitute auto” because Shazier had let someone else drive in violation of the contract with the rental car firm, Avis.

The Supreme Court reversed a 1st District Court of Appeal ruling in Geico’s favor. Justice R. Fred Lewis wrote that the appellate decision conflicted with prior Supreme Court rulings.

Kutasha Shazier was a named insured and owner of a Ford Expedition listed on her automobile insurance policy issued by the Geico. In August 2006, because Shazier’s vehicle became disabled due to transmission problems, she rented a Hyundai Sonata from Avis Rent-A-Car, designating Geico as the primary insurer.

Shazier permitted the rental vehicle to be used by Frederick Royal, who in turn allowed the rental vehicle to be operated by Tercina Jordan, who negligently crashed into a tree, resulting in serious injury to minor passengers in the vehicle and the death of another. The injured passengers and the representative for the decedent subsequently filed personal injury actions against Shazier, Jordan and Avis. Avis filed a cross-claim for indemnity against Shazier. Shazier’s insurer, Geico, sought a determination that it had no duty under the policy to defend and indemnify Shazier or Jordan.

The passenger contended that coverage existed because the rental car constituted a “temporary substitute auto” under the Geico policy. Geico countered that because Avis had not given Jordan express permission to drive the rental car, the rental vehicle was not a “temporary substitute auto” as to the named insured, Shazier, under the terms of the Geico policy and thus Geico had no duty to defend or indemnify either Shazier or Jordan.

A trial court agreed with Shazier. However, the district court reversed and ruled that the rental car did not constitute a “temporary substitute auto.” The district court determined that the rental contract between Avis and Shazier — a contract that prohibited anyone not authorized by Avis from driving the car– governed whether Avis had given its permission for the use of the car within the meaning of Geico’s policy.

With regard to an “owned auto,” the Geico insurance contract covers the policyholder and “any other person using the auto with [the policyholder’s] permission.” As to a “non-owned auto,” the insurance contract covers the policyholder and his or her relatives “when driving the non-owned auto” with permission of the owner. The term “non-owned auto” includes “a private passenger, farm or utility auto or trailer not owned by or furnished for the regular use of either [the policy holder] or a relative” but expressly excludes a “temporary substitute auto.”

The Supreme Court noted that Geico’s definition of “temporary substitute auto” required that the vehicle be “temporarily used with permission of the owner.” The 1st District held that because the Avis rental contract between Shazier and Avis did not expressly authorize Jordan to operate the vehicle, the rental car was not being “used with the permission of the owner,” which was Avis. Thus, the rental vehicle was deemed a “non-owned auto” instead of a “temporary substitute auto,” and Geico denied coverage under the policy.

However, the Supreme Court said the district court erred in coming up with a new definition of permission in such cases. Under a long-established doctrine, “liability is imposed on the owner of an automobile who voluntarily entrusts the vehicle to an individual who causes damage to others through the negligent operation of the vehicle,” the state’s high court said.

According to the court’s previous decisions, under Florida’s common law dangerous instrumentality doctrine, an owner’s, bailee’s, lessee’s, or permittee’s consent to the use of a vehicle “cannot be vitiated by invocation of third-party agreements [the Avis contract] that attempts to limit the scope of who may operate a vehicle.”

Geico’s policy defined “temporary substitute auto” as a vehicle not owned by the insured that is “temporarily used with the permission of the owner . . . as a substitute for the owned auto.” Thus, although the insured does not actually own the car, Geico covers a substitute auto as if it were owned by the insured as long the real owner gave permission for its use, the state’s high court said.

Accordingly, under Geico’s policy, Shazier had the permission of the owner of the vehicle, and the car became the insured’s “owned car” under the Geico policy at that moment. Shazier’s “owned car” by definition was being used with her permission at the time of the collision, and Geico cannot escape liability contrary to Florida law.

Chief Justice Charles Canady and Justice Ricky Polston dissented, saying they found no conflict with the earlier decisions.

If you have give permission to any driver to drive the car and you have a car insurance coverage- the coverage would apply even if it is rental. You however, need to get rental car auto insurance. Get your rental car insurance coverage now

Paul Colligan: On the Thanks giving weekend, I am planning to go from New York to Oklahama in a rented car. Will my auto insurance policy suffice this and how do I compare auto insurance so that I can get the maximum benefits.

Response: You will have to take into consideration for comparing rental car insurance quote :

  • Check to see if they are including fees for towing, storage, impound fees, loss of use, dismissed value and administrative services.
  • The Administrative services and the diminished value can vary widely if you are involved in an auto accident. In most states diminished value is not covered.
  • Check with your current insurance company or read your auto insurance policy to see if your present auto insurance policy will cover you, if you rent a car for pleasure purpose. However, please note that if you do not have a comprehensive coverage or collision coverage on your present auto insurance policy you will not be covered for damage or theft of the rented vehicle.
  • Check with the credit card company if your rental car insurance coverage is covered. The limitation in this is that they would provide coverage only for the rented car and not for the personal belongings or personal liability coverage for bodily injury or death claims.
  • Please verify the coverage provided by the credit card companies since they would also not provide coverage for the towing, diminished value or administrative fees. Policies of the credit card companies do change and so it would be a best idea to compare auto insurance coverage.
  • To know exactly what type of auto insurance coverage you have, call the toll-free number on the back of the card you will be using to rent the car. Also remember that credit card benefits are secondary to either your personal insurance protection or the insurance offered by the rental car company.

    Happy Thanks giving.

    Joe Jackson [Los Angles]: I am planning to go to Colorado in a rented car. Do I need seperate rental car insurance?

    Response: Joe, it is always important to review auto insurance coverage before you go for any trip out of your own province mainly because the requirement of each province for third party liablity is different and so you need to compare car insurance coverage and make sure you have the correct coverage for this.

    Insuring a rental car can be confusing, frustrating and downright daunting. Unfortunately, many consumers do not even think about car rental insurance until they get to the counter, which can result in costly mistakes—either wasting money by purchasing unnecessary coverage or having dangerous gaps in coverage.

    Before renting a car, the I.I.I. suggests that you make two phone calls—one to your insurance agent or company representative and another to the credit card company you will be using to pay for the rental car.

    1. Insurance Company
      Find out how much coverage you currently have on your own car. In most cases, whatever coverage and deductibles you have on your own car would apply when you rent a car, providing you are using the car for recreation and not for business.If you have dropped either comprehensive or collision on your own car as a way to reduce costs, you will not be covered if your rental car is stolen or damaged in an accident.

      Check to see whether your insurance company pays for administrative fees, loss of use or towing charges. Some companies may provide an insurance rider to cover some of these costs, which would make it less expensive than purchasing coverage through the rental car company. Keep in mind, however, that in most states diminished value is not covered by insurers.

    2. Credit Card Company
      Insurance benefits offered by credit card companies differ by both the company and/or the bank that issues the card, as well as by the level of credit card used. For instance, a platinum card may offer more insurance coverage than a gold card.Credit cards usually cover only damage to or loss of the rented vehicle, not for other cars, personal belongings or the property of others. There may be no personal liability coverage for bodily injury or death claims. Some credit card companies will provide coverage for towing, but many may not provide for diminished value or administrative fees. Some credit card companies have changed their policies, too, so you may not have as much coverage as you thought.

      To know exactly what type of insurance you have, call the toll-free number on the back of the card you will be using to rent the car. If you are depending on a credit card for insurance protection, ask the credit card company or bank to send you their coverage information in writing. In most cases, credit card benefits are secondary to either your personal insurance protection or the insurance offered by the rental car company.

      If you have more than one credit card, consider calling each one to see which offers the best insurance protection.

    At the Rental Car Counter

    Since insurance is state regulated, the cost and coverage will vary from state to state. Consumers, however, can generally choose from the following coverages:

    • Loss Damage Waiver (LDW)
      Also referred to as a collision damage waiver outside the U.S., an LDW is not technically an insurance product. LDWs do, however, relieve or “waive” renters of financial responsibility if their rental car is damaged or stolen. In most cases, waivers also provide coverage for “loss of use,” in the event the rental car company charges the renter for the time a damaged car can not be used because it is being fixed. It may also cover towing and administrative fees.Waivers, however, may become void if the accident was caused by speeding, driving on unpaved roads or driving while intoxicated. If you already have comprehensive and collision coverage on your own car, check with your personal auto insurer to make sure you are not duplicating coverage you already have. Should you decide it is necessary, this coverage generally costs between $9 and $19 a day.
    • Liability Insurance
      By law, rental companies must provide the state required amount of liability insurance. Generally, these amounts are low and do not provide much protection. If you have adequate amounts of liability protection on your own car, you may consider forgoing additional liability protection. If you want the supplemental insurance, it will cost between $7 and $14 a day.An umbrella liability policy, however, may be more cost-effective. Umbrella liability insurance is so named because it acts like an umbrella, sitting on top of your auto and homeowners (or renters) liability policies to provide extra protection including accidents while driving your own car or one that you rent. These policies, usually sold in increments of a million dollars, cost as little as $200 to $300 annually for a million dollars worth of coverage and another $50 to $100 for each additional million.

      Those who do not own their own car and are frequent car renters, can also consider purchasing a non-owner liability policy. This not only provides liability protection when you rent a car, but also when you borrow someone else’s car.

    • Personal Accident Insurance
      Personal Accident Insurance offers coverage to you and your passengers for medical and ambulance bills for injuries caused in a car crash. If you have adequate health insurance or are covered by personal injury protection under your own car insurance, you may not need this additional insurance. It usually costs about $1 to $5 a day.
    • Personal Effects Coverage
      Personal Effects Coverage provides insurance protection for the theft of items in your car. If you have a homeowners or renters insurance policy that includes off-premises theft coverage, you are generally covered for theft of your belongings away from home, minus the deductible. If you purchase this coverage through the rental car company, it generally costs between $1 and $4 a day.If you frequently travel with expensive items such as jewelry, cameras, musical equipment or sports equipment, it may be more cost-effective to purchase a personal articles floater under your homeowners or renters insurance policy. With such a floater, your valuable items are protected at home as well as while traveling anywhere in the world and the coverage is broader.

    Jennifer Jackson: I do not have a car and am going for for a rental car what coverages do I require for my personal belogings and let me know about other coverage I might need.

    Response: Those who do not own their own car and are frequent car renters, can also consider purchasing a non-owner liability policy. This not only provides liability protection when you rent a car, but also when you borrow someone else’s car.

  • Personal Accident Insurance
  • Personal Accident Insurance offers coverage to you and your passengers for medical and ambulance bills for injuries caused in a car crash. If you have adequate health insurance or are covered by personal injury protection under your own car insurance, you may not need this additional insurance. It usually costs about $1 to $5 a day.

  • Personal Effects Coverage
  • Personal Effects Coverage provides insurance protection for the theft of items in your car. If you have a homeowners or renters insurance policy that includes off-premises theft coverage, you are generally covered for theft of your belongings away from home, minus the deductible. If you purchase this coverage through the rental car company, it generally costs between $1 and $4 a day.

    If you frequently travel with expensive items such as jewelry, cameras, musical equipment or sports equipment, it may be more cost-effective to purchase a personal articles floater under your homeowners or renters insurance policy. With such a floater, your valuable items are protected at home as well as while traveling anywhere in the world and the coverage is broader.

    Remember to compare auto insurance quote at all times, since you are sure to find out the best offers and savings if you make a small effort.

    Jennifer : What is a Loss damage waiver?
    Response : This is a auto insurance coverage that can be opted for and is applicable for a rental car. This coverage is also referred to as a collision damage waiver outside the US. n LDW is not technically an insurance product. LDWs do, however, relieve or “waive” renters of financial responsibility if their rental car is damaged or stolen. In most cases, waivers also provide coverage for “loss of use,” in the event the rental car company charges the renter for the time a damaged car can not be used because it is being fixed. It may also cover towing and administrative fees.

    Waivers, however, may become void if the accident was caused by speeding, driving on unpaved roads or driving while intoxicated. If you already have comprehensive and collision coverage on your own car, check with your personal auto insurer to make sure you are not duplicating coverage you already have. Should you decide it is necessary, this coverage generally costs between $9 and $19 a day.
    Compare your auto insurance coverage before you opt in for a new coverage or buy auto insurance so that you get the right coverage at the lowest rate. Review your auto insurance quote from time to time.