rental car auto insurance

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

The program was rolled out in order to deter motorists from driving without  the states minimum liability insurance coverage limits. There are some parts of the state such as Dallas County where nearly 25 % of motorists or higher are not covered. The report revealed those who comply with the insurance laws end up spending at least $ 1 billion annually on optional coverage to protect themselves from the uninsured motorists. The report further stated that, TexasSure, has  made vehicle registration easier to verify if the Car is insured or not. According to an official at the  Texas State Department of Insurance, the program would require more time in order to show more positive results.

County  and law enforcement officials within the State can use the programs Auto Insurance database to track and send notifications to owners of vehicles which do not have auto coverage insurance. The officials are able to substantiate whether a car has been covered or not. Those who fail to comply could be made to pay stiff penalties. The fine for first time offenders ranges between $175 and $350 while fines for repeat offenders could be anything between $ 350 and $1000. The latter group would also have their drivers licenses suspended, and pay an annual surcharge of $250 for the next three years. If the vehicle is impounded, the owner would have to part with $133 for the trouble and a daily rate of $21.65 for each day the car remains in the impound yard.

Despite these tough measures which have been put in place, the number of Texas drivers without Auto Insurance still remains high as some motorists stop paying their insurance premiums as soon as they receive their updated insurance cards. According to Hagins, even other states which have been able to deal with this problem effectively took time to do it, but his department would require to be granted some legal leeway in order to achieve this. Pennsylvania, the third largest auto insurance market in the US started dealing with this issue in the early 1990′s.  InsureDirect.com’s home office is located in PA.  When the State Police and the PA Dept of Transportation started cracking down on it’s drivers, .  First and foremost, we did our best to provide the lowest prices on Pennsylvania’s State Minimum Insurance Coverage.  We have made this very same commitment to the drivers in the State of Texas.

In addition to compulsory auto liability coverage, some states require drivers to carry uninsured motorist coverage and others require drivers carry both uninsured (UM) and underinsured (UIM) motorist protection. Fifteen states plus the District of Columbia mandate uninsured motorist coverage for its drivers; they are: Illinois, Kansas, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Virginia and West Virginia.

Only six states enforce compulsory uninsured AND underinsured motorist coverage protection. They are: Connecticut, Maine, Minnesota, North Carolina (1/1/09), Vermont and Wisconsin.

Personal Injury Protection (PIP) also known as “No Fault” protection is the last major compulsory auto coverage law to which drivers may be subject. Sixteen states have in place compulsory PIP laws: Arkansas, Delaware, Florida, Hawaii, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, Pennsylvania and Utah. As is evidenced by its sheer concentration, PIP is very prevalent in the Northeast US; drivers in six of the 11 states from Maryland through Maine operate subject to “no fault” statutes.

Please Review car insurance  for checking the correct coverage which are mandatory and best  auto insurance rates. Happy and safe motoring. Bon Voyage.