Rental Car accident - Who pays? Insurance or Unauthorized driver?

[needadvise1]

What is the name of your state? CA

There are many posts on the same issue but could not find anything specific to my situation.

I was the "unauthorized" driver on the rental car and got distracted by a guy on cell phone coming into my lane and rear ended a truck causing minor damage to it (but badly damaged the rental car).

My gf had rented the car and declined the rental company's (Fox) insurance. I was added on as the second driver when making reservations online but since I flew in a day later they have classified me as the "unauthorized". My gf has full insurance in her family's name and I also have liability insurance of my own.

So who will pay for the damages? My insurance says they will cover liability and since I was the driver I am not sure if my gf's insurance will pay anything if at all. So will I be liable for the rental company's car and not the 3rd party's truck? Any tips/legal advise will be welcome.

Thanks!

 

[Who's Liable?]

You just potentially screwed your gf very very badly...You better hope she likes you...

As she was the one who rented the vehicle, and illegally allowed you to drive, she voided the terms of the contract... That said and done, the rental car company will want it's car back and depending on the severity of the damage, it can be up there!

Your GF will be VERY lucky if her insurance pays for the damage to the car, but chances are they won't! Why? becuse she voided the terms of the rental car agreement... She will have to pay for the damages out of her own pocket, and if that means buying a new car, the congrats, you just bought a new car!

You may have been listed as the "second driver" when you made the reservation online, but with most rental car companies, you have to sign the contract as well as provide a DL to the rental agent BEFORE you are allowed to drive the car. There is usually a fee associated with this, so I can't see them(car rental co.) adding you on as an authorized driver... Being added on online is not the same as being added on at the counter...

In CA, even if you would have purchased the rental car insurance, your insurance would be the primary, and the rental car co.'s insurance would be the secondary... It's just the way they do it there...

 

[stephenk]

"In CA, even if you would have purchased the rental car insurance, your insurance would be the primary, and the rental car co.'s insurance would be the secondary... It's just the way they do it there..."

actually, it's the other way around. However, most rental agencies do not have insurance policies on their vehicles. Instead they post a bond with the State to cover liability losses. so what happens is that the rental agency tells the renter they need to go through their own carrier if they wish to be defended in a lawsuit or to pay for damage to the rental car

 

[needadvise1]

Clarification

To clarify:

1. My gf would be liable for all repairs to the rental vehicle. Her insurance will not cover anything that has to do with the rental?

2. What about the 3rd party? Does insurance cover liability for that? Since I carry liability on my own for my own car.

Thanks...

 

[Who's Liable?]

"In CA, even if you would have purchased the rental car insurance, your insurance would be the primary, and the rental car co.'s insurance would be the secondary... It's just the way they do it there..."

actually, it's the other way around. However, most rental agencies do not have insurance policies on their vehicles. Instead they post a bond with the State to cover liability losses. so what happens is that the rental agency tells the renter they need to go through their own carrier if they wish to be defended in a lawsuit or to pay for damage to the rental car

Should've clarified myself... For Enterprise, and MOST car rental agencies, the primary is the private citizens, and secondary is car rental insurance... Unless they just recently changed laws?

 

[stephenk]

Enterprise and most other rental agencies no longer have insurance policies on their vehicles. they just post a bond with the DMV. That is how they get around the insurance code that makes rental cars with insurance coverage the primary carrier over the renter's personal coverage.

 

[fejee]

You just potentially screwed your gf very very badly...You better hope she likes you...

As she was the one who rented the vehicle, and illegally allowed you to drive, she voided the terms of the contract... That said and done, the rental car company will want it's car back and depending on the severity of the damage, it can be up there!

Your GF will be VERY lucky if her insurance pays for the damage to the car, but chances are they won't! Why? becuse she voided the terms of the rental car agreement... She will have to pay for the damages out of her own pocket, and if that means buying a new car, the congrats, you just bought a new car!

You may have been listed as the "second driver" when you made the reservation online, but with most rental car companies, you have to sign the contract as well as provide a DL to the rental agent BEFORE you are allowed to drive the car. There is usually a fee associated with this, so I can't see them(car rental co.) adding you on as an authorized driver... Being added on online is not the same as being added on at the counter...

In CA, even if you would have purchased the rental car insurance, your insurance would be the primary, and the rental car co.'s insurance would be the secondary... It's just the way they do it there...

I disagree that the gf's insurance would not pay for the damage to the rental vehicle. A rental vehicle under her policy would be considered an insured vehicle as it is in fact a substitute vehicle(substituted for her insured vehicle with her carrier).

As such, the rental vehicle is considered to be an additional insured vehicle under the gf's policy. This is because the standard ISO policy issued by most insurers do consider a rental vehicle as an insured vehicle according to the definition of an "insured vehicle", of such a policy.

Also, because the unauthorized rental driver did have permissive use from the renter to drive the rental vehicle, that unauthorized driver is considered to be an "insured person" under the gf's insurance(per the defintion of an "insured person", under the gf's policy). Unless of course the unauthorized driver is listed as an excluded driver under the gf's policy.

So where does that leave the poor unauthorized driver? Back into the arms of his gf. If dad hasn't tied the lass's hands, that is. The claim will be resolved in the following manner;

1. The gf's insurance would pay for the damage(including any downtime due to the rental vehicle becomeing inoperable ans unable to earn income for the rental agency) to the rental vehicle under the comp/colission coverage of the gf's policy, less any deductible(which the cheerful bf would gladly pay).

2.The gf's insurance would alo pay for any damage to the truck that was rear ended under the liability coverage of the gf's policy upto the PD limits.

3. It would also pay upto the available Bodily Injury limits for any injury claim made by the occupants of the car that was rear ended.

4. The liability only policy carried by the iresponsible bf would in fact be the excess carrier should the gf's policy limits be exhausted. In other words, if the driver of the car rear ended had serious injuries and his case was worth $120k. The gf's policy would pay him $100k(assuming that's the pol limit)and the bf's policy would pay an additional $15k(as that is the minimum amount one can carry in CA).

Oh! That online reservation u had for the rental, if they charged the gf''s credit card at the time the reservation was done and the reservation done online lists the bf as a 2nd driver, the rental company i believe may be on the hook and may not have good grounds to decline or disclaim coverage based on any violation of the terms of the rental agreement.

I also am aware that rental companies like enterprise have special agreements going with insurance companies wherein enterprise would agree to be the primary carrier in the event of an accident by trhe renter. They however, would be resposnsible for $15k only and everything over and above that is the responsibility of the renters insurance company.

Sorry that took quite an explaining to do but than, explaination is what the bf had ordered. On a silver platter, that is. Enjoy the complimentary meal mr. needadvice. later dude.

 

[needadvise1]

Thanks!

Thanks for the detailed explanation and it was also humorous! Hope it works the way you explained. Thanks for your time folks!

 

[stephenk]

"A rental vehicle under her policy would be considered an insured vehicle as it is in fact a substitute vehicle(substituted for her insured vehicle with her carrier). "

Not always true. If the rental is made because the insured's regular car is being repaired or out of service, then the rental car is considered a substitute vehicle for coverage purposes. Plus, the coverage by the personal carrier would only be for the liability portion of any claim, not for property damage to the rental car. you can't rent a porsche, total it, and then have your carrier pay to fix it when your carrier was only insuring your geo metro.

there is specific case law in California on "unauthorized drivers" in rental cars that make the girlfriend's permission without value. The rental contract has specific language voiding the contract if an unauthorized driver drives their car. the boyfriend is not considered a permissive user in this situation for coverage purposes because the girlfriend (insured) contractually has no authority to give permission.

 

[stephenk]

"That online reservation u had for the rental, if they charged the gf''s credit card at the time the reservation was done and the reservation done online lists the bf as a 2nd driver, the rental company i believe may be on the hook and may not have good grounds to decline or disclaim coverage based on any violation of the terms of the rental agreement. "

the online reservatioin is just that, a reservation to sign a contract to rent a car. Since the girlfriend only signed the rental contract, the boyfriend is not an authorized driver.

 

[Who's Liable?]

I disagree that the gf's insurance would not pay for the damage to the rental vehicle blah blah blah blah blah blah

What? Where did you get that crap from?

 

[fejee]

What? Where did you get that crap from?

stephenf maybe right in saying that gf's regular car must be out of service for her personal auto policy to kick in. but than how about when someone uses a rental veh coz he/she is out of town on vacation?

i think the standard auto policy defines an additional insured vehicle as one that is not available for your regular use, such as a rental car. itz possible that the rental car may qualify as an insured vehicle give the scenerio we have here. if it can qualify as an insured car then how come the unauthorized driver is not considered an insured person under the gf's pol. the unauth driver did have permissive use to drive an insured veh(insured veh defined based on the situation at hand)after all.

 

[stephenk]

let me clear up the confusion.

the rental car company insurance carrier or the company itself will always be the primary carrier if you get in an accident with a rental car. that is pursuant to the insurance code. the renter's personal auto insurance will be excess coverage above the rental company's coverage which is 15/30, unless you pay for the higher policy limits.

however, the gf is the only authorized driver pursuant to the rental contract. she cannot give permission to anyone to drive that rental car pursuant to the rental contract. that is why the rental company will be going after the gf and the boyfriend for the damages to the car. gf's carrier will not cover the damages because gf did not have permission/authority to give permission to the bf to drive the car.

 

[Who's Liable?]

let me clear up the confusion.

the rental car company insurance carrier or the company itself will always be the primary carrier if you get in an accident with a rental car. that is pursuant to the insurance code. the renter's personal auto insurance will be excess coverage above the rental company's coverage which is 15/30, unless you pay for the higher policy limits.

however, the gf is the only authorized driver pursuant to the rental contract. she cannot give permission to anyone to drive that rental car pursuant to the rental contract. that is why the rental company will be going after the gf and the boyfriend for the damages to the car. gf's carrier will not cover the damages because gf did not have permission/authority to give permission to the bf to drive the car.

yes and no...

As of 2002, the renter is the Primary in California...

"in 17 states the renters are primary, in 23 states the renters can be primary, and in 10 states (including Washington, D.C.) the renter is not primary."

"If someone rents a vehicle, it is in perfect, pristine condition when it is driven off the lot, but if an accident occurs and someone is injured, the liability and responsibility associated falls to the rental car companies for an action over which they have no control... An individual should, to the fullest extent possible, be responsible for his/her own actions."

First we must all recognize that each state has it's own laws governing insurance, primary, etc.... In my state for example, Enterprise, maintains the minimum coverage as requried by state law, and some other states do not cover their cars at all... "In Arizona, there is typically no mention of liability coverage due to the statutory requirement that rental companies provide liability coverage"

 

[stephenk]

11580.9. (a) Where two or more policies affording valid and
collectible automobile liability insurance apply to the same motor
vehicle in an occurrence out of which a liability loss shall arise,
and one policy affords coverage to a named insured engaged in the
business of selling, repairing, servicing, delivering, testing,
road-testing, parking, or storing motor vehicles, then both of the
following shall be conclusively presumed:
(1) If, at the time of loss, the motor vehicle is being operated
by any person engaged in any of these businesses, or by his or her
employee or agent, the insurance afforded by the policy issued to the
person engaged in the business shall be primary, and the insurance
afforded by any other policy shall be excess.
(2) If, at the time of loss, the motor vehicle is being operated
by any person other than as described in paragraph (1), the insurance
afforded by the policy issued to any person engaged in any of these
businesses shall be excess over all other insurance available to the
operator as a named insured or otherwise.
(b) Where two or more policies apply to the same loss, and one
policy affords coverage to a named insured engaged in the business of
renting or leasing motor vehicles without operators, it shall be
conclusively presumed that the insurance afforded by that policy to a
person other than the named insured or his or her agent or employee,
shall be excess over and not concurrent with, any other valid and
collectible insurance applicable to the same loss covering the person
as a named insured or as an additional insured under a policy with
limits at least equal to the financial responsibility requirements
specified in Section 16056 of the Vehicle Code. The presumption
provided by this subdivision shall apply only if, at the time of the
loss, the involved motor vehicle either:
(1) Qualifies as a "commercial vehicle." For purposes of this
subdivision, "commercial vehicle" means a type of vehicle subject to
registration or identification under the laws of this state and is
one of the following:
(A) Used or maintained for the transportation of persons for hire,
compensation, or profit.
(B) Designed, used, or maintained primarily for the transportation
of property.
(2) Has been leased for a term of six months or longer.
(c) Where two or more policies are applicable to the same loss
arising out of the loading or unloading of a motor vehicle, and one
or more of the policies is issued to the owner, tenant, or lessee of
the premises on which the loading or unloading occurs, it shall be
conclusively presumed that the insurance afforded by the policy
covering the motor vehicle shall not be primary, notwithstanding
anything to the contrary in any endorsement required by law to be
placed on the policy, but shall be excess over all other valid and
collectible insurance applicable to the same loss with limits up to
the financial responsibility requirements specified in Section 16056
of the Vehicle Code. In that event, the two or more policies shall
not be construed as providing concurrent coverage, and only the
insurance afforded by the policy or policies covering the premises on
which the loading or unloading occurs shall be primary and the
policy or policies shall cover as an additional insured with respect
to the loading or unloading operations all employees of the owner,
tenant, or lessee while acting in the course and scope of their
employment.
(d) Except as provided in subdivisions (a), (b), and (c), where
two or more policies affording valid and collectible liability
insurance apply to the same motor vehicle or vehicles in an
occurrence out of which a liability loss shall arise, it shall be
conclusively presumed that the insurance afforded by that policy in
which the motor vehicle is described or rated as an owned automobile
shall be primary and the insurance afforded by any other policy or
policies shall be excess.