Loss of Use on a Rental Car

    Posted by MAIA on May 8, 2019 12:01:00 AM

    QUESTION

    This question was answered based upon current rules, regulations & statutes in effect on April 17, 2019

    Need clarification on whether or not a rental car company can chase and insured and/or their insurance carrier for loss of use on a vehicle? I know carriers aren't paying it. But recently we had a case where the carrier denied it and the rental car company pursued the insured.

    ANSWER

    Kathy Cormier:  When a customer rents a vehicle they are signing the contract that they are ultimately responsible for any damage to that vehicle.  If the insurance carrier is not paying a particular damage, the rental car company will go after the renter.

     I’m also sending this to Irene Morrill, VP Technical Affairs to see if she may want to add anything...Irene?

    Irene Morrill:  As Kathy said as an adult if I sign a rental contract and assume damage to as well as loss of use of a rental car it will be upheld in court. What I sign is not the carriers responsibility unless the policy says it is. The 2008 MAP definitely excludes damage TO an auto I rent or borrow but is vague as to the loss of use for it. Loss of use has been paid in the past but it is not an “easy row to hoe”.  However at the end of 2017 MAPFRE took a case to court in MA and won. Reading it the rental company didn’t argue correctly but that is neither here nor there now.  Also the 2016 Part 4 has language in the insuring agreement about not paying loss of use so people need to buy the loss damage waiver or use a credit card that pays loss of use 

    And also they need to READ what they SIGN  

    This document is not a legal opinion and should not be relied upon as such. The intent of this document is to provide a general background regarding the topic or topics discussed, not to provide legal advice. Producers and agencies should consult an attorney regarding specific situations and specific questions with respect to the topic or topics covered in this document. Neither the Massachusetts Association of Insurance Agents, Number One Insurance Agency nor any of its employees shall be responsible for any errors or omissions regarding any statements made in this document, nor any errors or omissions regarding any statutes, regulations, court rules, and/or any other government documents cited in this document.

    Topics: 2018

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