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 Posted: Sun May 31, 2009 3:13 am Post subject: Rental Car while on business |
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I recently took a job that requires travel & renting a vehicle. While on business, if i get into an accident that is deemed my fault, who is liable for coverage- me or my employer?
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hoovers
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| Posted: Sun May 31, 2009 11:54 am Post subject: |
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That's a tricky question Hoover, and very smart of you to get some answers before you NEED them.....it's also an answer you need to get ASAP, (before something happens)...here's the deal...when you rent a vehicle typically the insurance from your 'regular' car transfers verbatim to the rental vehicle..however, if your regular policy does not include business use, you could very well get your claim denied....if on the other hand, you have a company car, and are using a rental in place of it, (rather than your personal vehicle)...then there would not be a problem your employers policy would be on it.
If it's your personal vehicle that the rental is in place of and there is not a business use endorcement on that policy, I think you'd need to contact your employer...and ask this very question (as well as the agent for your personal vehicle..have the agent check with CLAIMS..not just go on what he 'thinks' is the right answer)..Think I'd also look over the rental contract, it will say who is responsible..I'd then ask the rental car agency how this is set up with my employer...(ie have they provided their ins information or are you providing yours when you pick up the rentals) If your employer says, 'hey don't worry about it if something happens we'll take care of it...I'd get that in writing..this could easily turn into a giant mess should an accident that is deemed your fault arrise...
Let us know when/how under what circumstances you're using a rental..if you have a company car...if your car policy has buisness use attached to the policy. What state you are in...and what you are doing with the rental (there are other exclusion that can apply, so are you just flying in and getting a rental to go to meetings, meet clients etc...or are you transporting people from point 'a' to point 'b' in the rental)
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Lori
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| Posted: Sun May 31, 2009 3:42 pm Post subject: |
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This touches on one of my pet peeves. I think it's overreaching for an employer to try to shove rental car unpleasantness off onto the personal policy of the employee.
Lots of grey areas here. Say the settlement conference is continued to the next day, and the Blue Ridge Mountains or the coast are only an hour away. You gonna go back to the Ramada and watch tv? Or, for that matter, you're on your way to Denny's trying to stay within your chintzy per diem?
You've got at least two things to worry about: third-party liability and damage to your subcompact.
Under the Texas Personal Auto Policy, damage to a rental vehicle is afforded under the liability coverage. There s a business or occupation exclusion, but it doesn't seem to apply, with respect to both "rental" and third-party liability, to a "private passenger vehicle" (not to include a van or pickup.)
Then there's the issue of whether any liability your "deep pocket" employer may have under agency principles falls on his policy or yours.
You really need to get the specific laguage of the employer's policy before you. If the employer is an insurer, this will probably be like pulling teeth. Be sure to take a close, hard look at the Other Insurance clause. An escape clause can remove what the insuring agreement seems to promise.
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flint
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| Posted: Mon Jun 01, 2009 9:14 am Post subject: |
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Hi hoovers..
| Quote: | | I recently took a job that requires travel & renting a vehicle. |
Well Lori has asked you all that we need to know. I'd simply wanna know whether your employer had a word with you regarding the terms of use of a rental vehicle when you joined in. Didn't he explain a bit as to how this thing would be covered?
Steven |
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steven
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| Posted: Mon Jun 01, 2009 10:06 am Post subject: |
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| Quote: | | An escape clause can remove what the insuring agreement seems to promise. |
Flint, you have said it right. However, I was just wondering whether all the auto policies would have escape clauses or its only get attached to commercial policies. |
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kelvin
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| Posted: Mon Jun 01, 2009 10:23 am Post subject: |
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| Quote: | | You really need to get the specific laguage of the employer's policy before you. |
as well as your own policy, cause I've got a hunch that's were it's doing to go...unless you are using the rental while your 'company' (owned and insured) vehicle is not being used...and I'm afraid your personal policy will have the buisness exclusion..
| Quote: | | all the auto policies would have escape clauses or its only get attached to commercial policies. |
All of them.
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Lori
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| Posted: Mon Jun 01, 2009 10:39 am Post subject: |
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I dealt with this same issue in the past. I used my vehicle for business use and even though I was on the companies insurance it was only to cover me if I were in one of their vehicles. You may want to call your insurance agent before soemthing does happen. The insurance laws can be very tricky and hard to understand so be sure to have them explain how protected you really are.
In my case if one of the people I worked with was with me for job related causes I would have been held responsible if there was an accident. After hearing that I quit taking people in my vehicle and used the companies. |
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fireyone
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| Posted: Mon Jun 01, 2009 2:33 pm Post subject: |
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The Texas PAP is "excess" for vehicles you don't own. As far as coverage under one's own policy, I wonder if you couldn't get that resolved by email exchange with the agent. They may increase your premium, but I wouldn't expect this to amount to much.
I suspect that the rental car company is required to provide liability insurance up to legally mandated "minimum limits." Cold comfort really. And I see that my Enterprise ageement contains what amounts to an "escape clause."
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flint
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| Posted: Mon Jun 01, 2009 10:30 pm Post subject: |
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There are two issues here... who liable and how are the policies going to react.
As the driver, you are going to be liable. Easy enough.
So now you have two policies that come into play... your own person policy and your employers policy. Since you are acting within the scope of your employment and as such, an agent of your company, your employers policy should address the claim on a primary bases. Your employer should have liability coverage with symbol 1 (and auto... and this is almost always the coverage symbol under liability) or symbol 8 (hired auto). If they do, then their policy would be able to provide coverage. Your auto policy may provide coverage as well.
Your employers Business Auto Policy contains a clause that treats Hired Autos as auto's "you own". It's also primary for autos "you own". So your employers BAP would address the loss on a primary bases. Your own person policy would probably also provide you coverage (depending on what you were doing for work at the time) but it would be on an excess bases. Meaning that it would only react if your employers BAP was not sufficient to protect you. |
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tcope
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| Posted: Tue Jun 02, 2009 12:00 am Post subject: |
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| Quote: | | your employers policy. |
"If" there is one Todd..  I'm not sure there is..
| Quote: | | They may increase your premium, but I wouldn't expect this to amount to much |
I went thru this very thing my self in 2001 or 2002, the company I work for decided it would be cheaper to take my company car and pay me mileage..  so I bought a new decent throw away car...had to rate it as buisness use on my policy... my premium nearly doubled...  Then one year later the company decided (after paying 700-1100.00) a month in mileage to me every month, that, "hey Lori guess what? you were right this isn't cheaper, here's a company car back" Course then I had a new (2002) car with a butt load of miles on it...so thought I'd keep it a year or so till the mileage evened out...(still have it actually  )
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Lori
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| Posted: Tue Jun 02, 2009 12:21 am Post subject: |
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Here's an excerpt from Insurance Issues Related to the Short-Term Rental of Cars, offered for our edification by Cambridge Property & Casualty:
Question:
Will the business automobile insurance carrier protect an employee who has rented a car or truck in his or her personal name?
Answer: Yes and No
No, unless an endorsement titled Employees Hired Autos has been added to the Business Auto Policy. . . . because the auto lease agreeent is usually written in the employees personal name, not in the business name, and charged to the employee's personal credit card.
*********
This is an interesting note. The author goes on to comment that, even if you buy the optional insurance for damage to the rental car, it will usually exclude coverage if you've had any alcohol, whether or not you're "impaired." 'Course, tcope and I would never have to sweat that one.
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flint
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| Posted: Tue Jun 02, 2009 12:48 am Post subject: |
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| Quote: | | No, unless an endorsement titled Employees Hired Autos |
An endorsement would not be needed, unless they call a coverage symbol and "endorsement" (which would be incorrect).
Hey, I just moved here a few years ago... I'm not LDS.  |
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tcope
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| Posted: Tue Jun 02, 2009 2:07 am Post subject: |
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I think what he's driving at, tcope, is that when the employee rents a car, it wasn't rented by "you," usually defined as the named insured, i.e., the employer.
Consequently, the rental car wouldn't be an auto "you" hire. I don't doubt that coverage would be afforded to the employer for any respondeat superior liability, but who cares about him?
As to Lori's point, I don't doubt that rates soar when you divulge that you are using a car for regular business use. Were one to conceal that fact, though, I suspect that the insurer would rely on a "material misrepresentation" defense, not a specific policy exclusion. I just can't find a "business use" exclusion in my policy, except the usual stuff relating to transporting for hire, or relating to what we used to call the "automobile business." (Talking only private passenger autos here, not trucks or vans.)
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flint
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| Posted: Tue Jun 02, 2009 3:11 am Post subject: |
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| Quote: | I think what he's driving at, tcope, is that when the employee rents a car, it wasn't rented by "you," usually defined as the named insured, i.e., the employer.
Consequently, the rental car wouldn't be an auto "you" hire. I don't doubt that coverage would be afforded to the employer for any respondeat superior liability, but who cares about him? |
One reason why I broke it up into two parts is that liability is one issue and coverage is another. If the renter is liable it then becomes a question of coverage. Under the Business Auto Policy the renter would be considered an insured under the policy if the company has coverage symbol 8 for Hired Auto. Who "You" is not a question and there is no definition of "You" in the BAP. You _is_ the named insured which is going to be a company. There is criteria for who is an "insured" and as mentioned above this is as follows:
Who is an insured:
b. Anyone else while using with your permission a covered "auto" you own hire or borrow except: [no exception applies to the OP's post]
Comp and Coll are even more liberal when it comes to coverage.
| Quote: | | As to Lori's point, I don't doubt that rates soar when you divulge that you are using a car for regular business use. Were one to conceal that fact, though, I suspect that the insurer would rely on a "material misrepresentation" defense, not a specific policy exclusion. |
That part of Lori's post does not apply as she was using a vehicle she owns.. not a company vehicle or a "hired" (rented) vehicle that she does not own. | Quote: | | I just can't find a "business use" exclusion in my policy, except the usual stuff relating to transporting for hire, or relating to what we used to call the "automobile business." (Talking only private passenger autos here, not trucks or vans.) |
Normally you won't find one other then livery and in the business of selling, etc. What you will find an an "Other Insurance" clause that would come into play. This is where owning the vehicle and not owning the vehicle makes a big difference. |
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tcope
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| Posted: Tue Jun 02, 2009 4:30 am Post subject: |
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You've got me on the ropes, here, tcope, because I don't have access to a specimen form. Hmm. . . "you own hire or borrow". You, you you. You sure there's no definition of "you" in the policy?
I'm looking at this case here, Seaco Ins. v. Davis-Irish, US Court of Appeals, First Circuit, 300 F.3rd 84, where the court examines what it styles a "business auto policy." They say "The first page of the policy form explains that, throughout the policy, the word "you" refers to the named insured shown in the declarations."The court goes on to say "Undeterred by the seemingly clear definition of the key pronoun ("you"), the appellant. . . . posited that "you," as used in this endorsement, reasonably could be understood to include Garrand's employees while acting in the course of employment." The court disagreed.
But we're agreed that coverage would be available under the Personal Auto Policy on either a primary or excess basis, no?
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flint
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