Rental Car Coverage and the MAP - So Much Exposure & So Little Coverage!
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('8&$7,21352*5$0
Rental Car Coverage
and the MAP -
So Much Exposure &
So Little Coverage!RENTAL CAR
COVERAGE & THE MAP-
SO MUCH EXPOSURE &
SO LITTLE COVERAGE
Robin Federici, CPCU, AAI, ARM, AINS, AIS,
CPIW
PO BOX 781
NORTH KINGSTOWN, RI 02852
Phone: 401-294-3557 Fax: 401-294-3557
Fred’s Cell: 401-524-4567 Robin’s Cell: 401-529-9617
E-mail: EFEDERICI@IETA.BIZ ROBINF@IETA.BIZ
Web site: WWW.IETA.BIZThis material has been designed for use in training programs for insurance industry
personnel. It is not intended to be used as a complete reference resource on the programs
and coverages outlined herein.
The programs use “standard” policy forms and endorsements for the purposes of
discussing the exposures to loss that may exist, some of the coverage options available to
treat them, and to provide a framework for discussions with carriers you represent
concerning the programs they have available.
Coverages, rules and materials presented during this program may differ from those used
by individual insurance companies. Contact individual carriers for details about
interpretations of their eligibility requirements, particular insurance contracts and rates.
Copyright 2014 by Insurance Education & Training Associates, LLC. All rights
reserved. This document or any part thereof may not be reproduced or utilized in any
form or by any means, electronic or mechanical, including photocopying, recording, or
by any information retrieval system, without the express written consent of Insurance
Education & Training Associates, LLC. Inquires should be addressed to: PO Box 781,
North Kingstown, RI 02852 E-Mail: robinf@ieta.biz.
-2-AUTO RENTAL ISSUES
Auto Rental Agreement Excerpt:
This Agreement is between the person signing it, as the car renter (“you,”
“your” or “yours”) and ( the rental car company) and covers the rental of
each car by us to you under the Service (“rental”). You agree and
understand that your obligations under this Agreement are personal and
are not assignable or transferable by you.
2. Meaning of Car - The word “car” means the vehicle rented to you or its
replacement and includes tires, tools, equipment, accessories, plates and car
documents.
3. Who May Drive the Car - Except where otherwise specifically
authorized by applicable law, only you, your spouse or domestic partner,
or, if you rent from us under your employer’s corporate account
agreement, your employer or a regular fellow employee incidental to
business but only with your prior permission. The other driver must be at
least 25 years old and must be a capable and validly licensed driver.
9. Prohibited Use of the Car
Certain uses of the car and other things you or a driver may do, or fail to
do, will violate this Agreement. It is a violation of this paragraph if:
A. You use or permit the car to be used: 1) by anyone other than an
authorized driver; 2) to carry passengers or property for hire: 3)
to tow or push anything; 4) to be operated in a test, race or contest,
or on unpaved roads; 5) while the driver is under the influence of
alcohol or a controlled substance; 6) for conduct that could properly
be charged as a felony or misdemeanor, including the transportation
of a controlled substance or contraband; 7) recklessly or while
overloaded; 8) if rented in the United States, outside of the United
States
10. Loss Damage Waiver (LDW) - You understand that you may choose
to accept or decline the LDW option. You understand that LDW is not
insurance and is not mandatory.
-3-AUTO RENTAL ISSUES
Auto Rental Agreement Excerpt:
11. Damage to/Loss of the Car
If you do not accept LDW, or if the car is lost or damaged as a direct or
indirect result of a violation of paragraph 9, you are responsible and
will pay us for all loss of or damage to the car regardless of cause, or
who, or what caused it.
If the car is damaged, you will pay our estimated repair cost, or if, in our
sole discretion, we determine to sell the car in its damaged condition, you
will pay the difference between the car’s retail fair market value before
it was damaged and the sale proceeds. If the car is stolen and not
recovered you will pay us the car’s fair market value before it was
stolen.
As part of our loss, you’ll pay the full value of the vehicle, plus:
loss of use of the car, without regard to our fleet utilization
an administrative fee
towing and storage charges, if any (“Incidental Loss”). You authorize us
to process any or all of our Incidental Loss to the card you use to pay for
the rental.
Diminution in value, regardless of whether the vehicle is repaired
Any out-of-pocket expenses incurred by us as a result of the loss
16. Credit Card Billing
You agree that all charges will be billed to the card designated by you and
that your signature on the Master Rental Agreement will be deemed to have
been made on the applicable credit card voucher
-4-MA PERSONAL AUTOMOBILE POLICY
(MAP)
DEFINITIONS:
DEFINITION OF “YOU”:
“Refers to the person(s) named in Item 1 of the Coverage Selection Page.”
This definition is narrower than other personal lines insurance contracts,
such as the HO policy, by not automatically including the resident spouse
Only the person(s) named are considered a “you” for coverage purposes
DEFINITION OF “ACCIDENT”:
“Means an unexpected, unintended event that causes bodily injury or
property damage arising out of the ownership, maintenance or use of an
auto”
This definition eliminates the need for an “intentional loss” exclusion
When used, would extend coverage to ANY AUTO not just autos listed
on the Coverage Selection page
DEFINITION OF “AUTO”:
“Means a land motor vehicle or trailer but does not include: A. any
vehicle operated on rails or crawler treds B. any vehicle or trailer while it
is located for use as a residence or premises. We will consider such a
vehicle as an auto while it is being used on public roads or for recreational
use C. a farm tractor or other equipment to be an auto while it is being used
on public roads D. any vehicle not subject to MA Motor Vehicle
registration such as a moped, dirt bike, mini-bike, snowmobile or an all-
terrain vehicle (ATV)
-5-MA PERSONAL AUTOMOBILE POLICY (MAP)
DEFINITIONS:
DEFINITION OF “YOUR AUTO”:
“Means A. the vehicle or vehicles described on the Coverage Selection
Page B. any auto whiles used a temporary substitute for the described auto
while that auto is out of normal use because of a breakdown, repair,
servicing, loss or destruction C. a private passenger auto, trailer,
motorcycle, pick-up truck, van or similar vehicle, to which you take title
or lease as a permanent replacement for a described auto or as an
additional auto. We provide coverage for an additional auto only if you
ask us to insure it within seven days after you take title or the effective date
of the lease. If a replacement or additional auto is a pick-up truck, van or
similar vehicle, it must not be used for the delivery or transportation of
goods or materials unless such use is incidental to your business of
installing, maintenance or repairing furnishings or equipment.
Under Part 1, 2, 3, 4, 5, and 5 the term “your auto” also includes any
trailer not described on the Coverage Selection Page as covered under those
parts.
When used in a coverage form, this definition is more restrictive than the
word “auto”, however, trailers are automatically granted liability
coverage.
This definition is primarily used when granting coverage to other than
“you”
DEFINITION OF “FAMILY MEMBER”:
“Means anyone living in your household who is related to you by blood,
marriage or adoption. This includes step-children or foster children.”
-6-MA PERSONAL AUTOMOBILE POLICY (MAP)
INSURING AGREEMENTS
PART 1 – BODILY INJURY TO OTHERS - (COMPULSORY)
Under this Part, we will pay damages to people injured or killed by “your auto” in
Massachusetts accidents. The damages we pay are the amounts the injured person is
entitled to collect for bodily injury" through a court judgments or settlement. We
will pay only if you or someone else using “your auto” with your consent is
legally responsible for the accident. The most we pay for injuries to one or more
persons as a result of bodily injury to any one person in any one accident is $20,000.
Subject to this $20,000 limit, the most we will pay for injuries to two or more peoples
as a result of bodily injury to two or more people in any one accident is $40,000.
This is the most we will pay as the result of a single accident no matter how many
autos or premiums are shown on the Coverage Selection Page . . . .
OVERVIEW- PART 1 (BI) Insuring Agreement
x An insured can ONLY drive autos defined as “your auto”. This
definition includes temporary substitutes; therefore, ONLY if a
vehicle is rented as a temporary substitute would coverage apply!
x Unless the driver is “you”, other drivers are covered if driving with
the consent of “you”
x Accidents must occur only in MA
x The insuring agreement continues, beyond what is stated above, to
exclude: 1. guest occupants, 2. accidents outside of MA & places in
MA where the pubic has no right to access, 3. WC claims.
x The insuring agreement continues, beyond what is stated above,
regarding other insurance:
x Coverage is primary for “your auto” but if there is more than
one insurance policy that is primary, carriers share (P/R) the
loss payment
x Coverage is excess for non-owned autos
-7-MA PERSONAL AUTOMOBILE POLICY (MAP)
INSURING AGREEMENTS
PART 2 – PERSONAL INJURY PROTECTION - (COMPULSORY)
The benefits under this Part are commonly known as “PIP” or “No-fault” benefits. It
makes no difference who is legally responsible for the accident. We will pay the
benefits described below to you and other people injured or killed in auto
accidents. For any one accident, we will pay as many people as are injured, but the
most we will pay for injuries to any one persons is $8,000. This is the most we will
pay . . . .
We will pay PIP benefits to or for: 1. You or any other person, if injured while
occupying your auto with your consent 2. You, or anyone living in your
household, if injured, while occupying an auto which does not have
Massachusetts Compulsory Insurance or if struck by an auto which does not have
Massachusetts Compulsory Insurance. 3. Any pedestrian, including you, if struck
by your auto in Massachusetts or any Massachusetts resident who, while a
pedestrian, is struck by your auto outside of Massachusetts.
OVERVIEW- PART 2 (PAP) Insuring Agreement
Above is only a short excerpt of the PIP insuring agreement; however,
the coverage that would apply to rental car accidents is noted below.
If an insured injured others as a result of an accident with a rental car,
PIP would only respond in the following circumstances:
PIP is a MA resident’s right – HOWEVER, most of the
coverage only applies to when the vehicle is in MA & “your
auto”.
EXCEPTIONS for others:
o Your resident household members would have coverage if
injured while occupying or struck by an auto which does
not have MA compulsory insurance.
o Pedestrians in MA struck by “your auto” AND a MA
resident that is a pedestrian out of state and struck by
“your auto” outside of MA
-8-MA PERSONAL AUTOMOBILE POLICY (MAP)
INSURING AGREEMENTS
PART 3 – BODILY INJURY CAUSED BY AN UNINSURED AUTO (UMBI) -
(COMPULSORY)
Sometimes an owner or operator of an auto legally responsible for an accident is
uninsured. Some accidents involve unidentified hit-an-run autos. Under this Part, we
will pay damages for bodily injury to people injured or killed in certain accidents
caused by uninsured or hit-and-run autos. We will pay only if the injured person is
legally entitled to recover from the owner or operator of the uninsured or hit-and-run
auto. We will pay for hit-and-run accidents only if the owner or operator causing the
accident cannot be identified . . . .
OVERVIEW- PART 3 (UMBI) Insuring Agreement
Above is only a short excerpt of the UMBI insuring agreement; however,
the coverage that would apply to rental car accidents is noted below.
Other than the coverage provided to “you”, coverage could be provided
to others as follows:
Household members occupying any auto or as a pedestrian
Others occupying “your auto”
o EXCEPTION: Neither of the above would be eligible
under the auto renters UMBI policy if:
They have their own policy
The have a policy in a household members name
) UNDERINSURED MOTORIST
There is also an Underinsured (UIM) Option (Part 12) available. If the
MAP includes Part 12 the coverage is similar
-9-MA PERSONAL AUTOMOBILE POLICY (MAP)
INSURING AGREEMENTS
PART 4 – DAMAGE TO SOMEONE ELSE’S PROPERTY (PD) -
(COMPULSORY)
Under this Part, we will pay damages to someone else whose auto or other property is
damaged in an accident. The damages we pay are the amounts the person is legally
entitled to collect for property damage through a court judgment or settlement. We will
pay only if you or a household member is legally responsible for the accident. We
will also pay if someone else using “your auto” with your consent is legally
responsible for the accident. Damages include any applicable sales tax and the costs
resulting from the loss of use of the damaged property.
“You” and household members have coverage for driving any auto
Others must be driving only a “your auto” with consent
The legal responsibility of “you” & “household members” provides
EXCESS coverage for non-owned autos
There is coverage for contractual liability assumption (You hold Hertz
harmless of all injuries when you rent their car) since there is NO
contractual liability exclusion
Exclusions:
o As a public or livery conveyance
o In the business of autos (selling, servicing, repairing or parking) & in any
business (with some exceptions)
o Vehicles owned or used regularly (unless a premium is shown for the auto)
by “you”, their spouse, or any household member
o Autos or any other property rented or in the care of “you” or the
legally responsible person (except for a private residence or garage rented in
their care)
- 10 -MA PERSONAL AUTOMOBILE POLICY (MAP)
INSURING AGREEMENTS
PART 5 – OPTIONAL BODILY INJURY (OBI) – (OPTIONAL)
Under this Part, we will pay damages to people injured or killed in accidents if
you or a household member is legally responsible for the accident. We will also
pay damages if someone else using “your auto” with your consent is legally
responsible for the accident. . . .
“You” and household members have coverage for driving any auto &
unlike Part 1 (BI) the accident does not have to only occur in MA & will
pay injuries to guests!
There are exclusions that are contained in the insuring agreement and are
almost identical to those under Part 4 – PD
OUT OF STATE & CANADA COVERAGE
Extraterritorial Coverage
1. Financial Responsibility or similar laws – BI or PD limits required that
are higher than those purchased; the policy will provide the higher
required limits
2. Compulsory Insurance or similar laws - any requirement to have
insurance whenever an auto is used in the state or province, the policy
will provide the required minimum amounts and types of coverage
- 11 -MA PERSONAL AUTOMOBILE POLICY (MAP)
INSURING AGREEMENTS
PART 6 – MEDICAL PAYMENTS (MP) – (OPTIONAL)
Under this Part, we will pay reasonable expenses for necessary medical and
funeral services incurred as a result of an accident. We will pay for expenses
resulting from bodily injuries to anyone occupying your auto at the time of the
accident. We will also pay for expenses resulting from bodily injury to your or any
household member if struck by an auto or if occupying someone else’s’ auto at the
time of the accident . . .
x Coverage is provided regardless of negligence – arising out of an
accident & there is no limitation that the accident occurs in an auto listed
in the policy
x Like the UMBI – this is a “one bite of the apple” coverage.
"Occupying" means: in, upon, entering into, or getting out of.
INSURING AGREEMENTS – Physical Damage
MAIA – PART 7 – COLLISION
Under this Part, we will pay for any direct and accidental damage to your auto caused by
a collision. We will also pay for collision damage to other private passenger autos
while being used by you or a household member with the permission of the owner. It
does not matter who is at fault.
MAIA – PART 8 – LIMITED COLLISION
Under this Part, we will pay, in some situations, for direct and accidental damage to your
auto caused by a collision. We will also pay in these situations for damage to other
private passenger autos while being used by you or a household member with the
permission of the owner.
MAIA – PART 9 – COMPREHENSIVE
Under this Part, we will pay for direct and accidental damage to or loss of your auto other
than damage caused by collision. We will also pay for such damage to other private
passenger autos while being used by you or a household member with the permission
of the owner.
- 12 -MA PERSONAL AUTOMOBILE POLICY (MAP)
) If the insured rents a vehicle then damage to the rental vehicle
would fall under the physical damage coverages!
RENTAL CAR COVERAGE- PHYSICAL DAMAGE – Exclusions:
The Physical Damage insuring agreements under all three MAIP
coverages precludes any coverage for the damage to the rental
auto only if there was no permission of the autos owner
x Outside of any “family member”, anyone else that may be granted
permission to drive a rental car under the rental car contract would
not be afforded any coverage under our insured’s auto policy since
permissive users are granted coverage only for driving “your
covered auto”
x There may be a debate about what is a private passenger auto.
Some carriers say it is “cars” only. Others include pickups and
vans. The broadest interpretation is any auto that is eligible for
coverage under the MAP
x Under the General Exclusions for optional coverages there is:
o Coverage for electronic equipment permanently installed
in places intended by the manufacturer. There is only a
$1,000 limit for these types of equipment if installed in
unusual places.
o No coverage for speed detection equipment
o Custom furnishings or custom equipment in a p/u or van
o No coverage for intentional losses
- 13 -MA PERSONAL AUTOMOBILE POLICY (MAP)
PHYSICAL DAMAGE – LOSS PAYMENT:
The rental contract outlines the responsibility of the renter for
payment following a loss. These contractual agreements may be in
conflict with the MAP
PARTS 7, 8 & 9:
We will pay the cost to physically repair the auto or any of its parts up
to the actual cash value of the auto or any of its parts at the time of the
collision/loss. The most we will pay will be either the actual cash value of
the auto or the cost to physically repair the auto, whichever is less. We
will, at our option, repair the auto, repair or replace any of its parts, or
declare the auto a total loss. If the repair of a damaged part will impair the
operational safety of the auto we will replace the part.
In all cases we will subtract the deductible amount you selected. Unless
you selected a different amount, the law sets your deductible at $500. Your
deductible is shown on the Coverage Selections Page. (For Part 9 –
Comprehensive – the deductible does not apply to glass breakage)
PART 8 – LIMITED COLLISION
We only pay under this Part for multiple car accidents in which the
driver of the auto we are covering was no more than 50% at fault. We will
not pay if the owner of the other auto cannot be identified . . .
We will consider the driver of the auto covered under this Part to be no
more than 50% at fault if:
1. That auto was legally parked when struck by another auto.
2. That auto was struck in the rear by another auto moving in the same
direction.
3. The operator of the other auto was convicted of certain violations . . .
However, we will not pay if the operator of the auto covered under this
Part was also convicted of one of the same violations.
4. That driver is entitled to recover in court against an identified person
for some reason other than those listed above.
- 14 -You can also read
