Tech Talk: MAP and Renting an Auto: Let’s Dispel This Ugly Rumor Once and For All

    Posted by MAIA on May 28, 2019

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    By Irene Morrill, CPCU, CIC, ARM, CRM, LIA, CRIS, CPIW  — VP of Technical Affairs, MAIA  

    First … a reminder for you to save the dates October 31 to November 3 for MAIA’s Big Event at the Boston Marriott Copley Place.  I am excited that we have THE Bill Wilson, CPCU, ARM, AIM, AAM, Founder and CEO of Insurance Commentary and former VP Technical Affairs, IIABA speaking.  He is author of the SUPERB book “When Words Collide.” He is a totally awesome speaker, both knowledgeable and entertaining! You don’t want to miss out!



    So… the Question – MAP and Renting an Auto

    An agent emailed me and asked if their client’s auto coverage would cover them on vacation even though the owned and insured auto would be used by other family members while they were away. The agent said they were awaiting an answer from underwriting but also would like my opinion.

    I gave my answer/opinion. Later, the agent emailed me and said the underwriter’s answer was different. The company underwriter stated that: “if the vehicle that has the collision coverage on it is being used, then they would need to buy the coverage on vacation, and if it is not being used then the coverage would go with them” 

    What in the WORLD is going on? That statement is SO WRONG and so NOT the language in the MAP!  I suggested that the agent ask the underwriter where those words are in the policy.

    What does the MAP do?

    The MAP, like the PAP, is designed to do two things simultaneously: cover automobiles and cover people. The automobiles covered must fit a definition of either “auto” or “your auto.”  These autos can be owned, rented, or borrowed. The people covered are you, household members, and someone using “your auto.” The MAP can multitask. It can cover both people and automobiles at the same time!

    What types of vehicles does the MAP apply to?

    When I’m teaching a class, I explain that there are two types of vehicles in this world : Ones I own, and ones I don’t own. There is a definition of “your auto” in the MAP to address the types of owned vehicles that the MAP allows. 

    The MAP “follows” both you (named insured) and household members (related to you and living in your household).

    Types of Non-Owned Autos

    The MAP applies to two types of non-owned autos. A simplistic explanation I use in class is:

    1. The auto “I have to use.”
    2. The auto “I want to use.”

    The “I have to use” is included in the definition of “your auto.”

    The 2008 MAP “your auto” definition includes:

    1. Your Auto – means:
      1. The vehicle or vehicles described on the Coverage Selections Page.
      2. Any auto while used as a temporary substitute for the described auto while that auto is out of normal use because of a breakdown, repair, servicing, loss or destruction. But the term “your auto” does not include a substitute vehicle owned by you or your spouse. 

    The 2016 MAP “your auto” definition is almost the same …enough for this discussion:

    1. Your Auto – means:
      1. The vehicle(s) described on the Coverage Selections Page.
      2. Any auto while used as a temporary substitute for the described auto with the consent of the owner while the described auto is out of normal use because of a breakdown, repair, servicing, loss, or destruction. This does not include a motorcycle. However, if a motorcycle is the vehicle described on the Coverage Selections Page, then a motorcycle used as a temporary substitute is included in the term your auto. However your auto does not include a substitute vehicle owned by you.

    When the “your auto” on the MAP coverage selections page is inoperable and you use something in its place, you are using a “non-owned” auto because you “have to” – a temporary substitute for a “your auto.” Since your vehicle is not usable/available, I think this is where the confusion lies. If my car is inoperable, then it “appears” that the policy is only covering one vehicle at a time. Though, this isn’t true because your car is STILL covered; it just isn’t currently being used by you.

    MAP and the “I want to use” of Non-Owned Autos

    Does the MAP cover you and household members in situations OTHER than the “I have to” situation? Your auto is fine, but you need another one for whatever reason?

    ABSOLUTELY!

    Does the MAP actually state that you’re covered whenever you or a household member want to rent or borrow an auto? No. One needs to read the policy.  Novel idea …reading the policy to see what is or is not covered!

    One must read the “insuring agreement” section of each coverage in the MAP to determine if there is coverage. The insuring agreement is usually the first paragraph of each part.

    2008 MAP

    Part 4. Damage to someone else’s property

    We will pay only if you, or a household member, is legally responsible for the accident….

    Part 5 Optional Bodily Injury to Others

    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.

    Part 6 Medical Payments

    We will also pay for expenses resulting from bodily injuries to you or any household member if struck by an auto or if occupying someone else’s auto at the time of an accident 

    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 consent of the owner.

    Part 8 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 consent of the owner.

    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 or loss to other private passenger autos while being used by you or a household member with the consent of the owner.

    2016 MAP

    Part 4

    Under this Part, we will pay for damage or destruction of the tangible property of others caused by an accident and arising from the ownership, maintenance, or use of an auto, including loading and unloading.
    …  

    We will pay only if you, a household member, or someone else using your auto with your consent is legally responsible for the accident.

    Part 5

    Under this Part, we will pay damages to people injured or killed in an accident if you or a household member is legally responsible for the accident  and such accident arises out of the ownership, maintenance, or use of an auto by you or the household member.

    Part 6

    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 injuries to you or any household member if struck by an auto or if occupying someone else’s auto at the time of the accident.

    Part 7

    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 consent of the owner.

    Part 8

    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 consent of the owner.

    Part 9

    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 or loss to other private passenger autos while being used by you or a household member with the consent of the owner

    Both the 2008 and 2016 MAP allow you and household members to rent/borrow an auto that is NOT a “temporary substitute” for an inoperable “your auto.”

    The 2016 MAP got a little “squiggy” in the Part 4 Damage to Someone Else’s Property section.  The discussion of the use of other autos is not directly connected to “you” and “household members.”

    However, AIB wrote a letter stating that the intention of Part 4 is: “to provide coverage when driving a rented or borrowed car consistent with the scope of coverage traditionally enjoyed by Massachusetts policyholders.”

    Whether the 2008 or 2016 MAP, the coverage from Parts 4 Damage to Someone Else’s Property and Part 5 Optional Bodily Injury will follow you and household members if you are “legally responsible.”

    • Can you be legally responsible when you rent or borrow a car? Absolutely! 
    • Can your listed auto be used when you rent or borrow another auto, and have the coverage apply to both situations? Absolutely!

    Whether the 2008 or 2016 MAP, Part 6 Medical Payments follows you and household members when occupying “someone else’s vehicle.”

    • Could that be a vehicle that was rented or borrowed, “just because.” Yes! Coverage can apply even when the “your auto” is operable and being used.

    Coverage under Parts 7, 8, 9 also follows you and household members whether insured under the 2008 or 2016 MAP. However, these physical damage coverages only allow you and household members to use a rented or borrowed “private passenger auto” as opposed to ANY type of auto or vehicle.

    • Will coverage follow me and household members even though “my auto” is being used? YES!!! 

    Under Parts 7,8,9 we must remember that ONLY ACV (actual cash value) is paid, and many rental contracts require that “diminished value” and other costs/expenses be reimbursed if the rented vehicle is damaged. 

    The 2016 MAP added an exclusion “For liability assumed under any other contract or agreement” under Part 5 Optional Bodily Injury, Part 7 Collision, Part 8 Limited Collision, Part 9 Comprehensive — which could be a problem for a contractual commitment made by the insured in a rental contract.

    Are there any other considerations?

    How about all the normal restrictions in the MAP (2008 or 2016) that apply to “your auto” or any other auto.

    Coverage Territory – Canada is the only foreign country in which the MAP applies.

    Regular Use – You and household members can use vehicles you do not own but “not too much.” There is a regular use exclusion under Parts 4,5,6,7,8,9. If you or a household member are going to be renting a vehicle “just because” for more than 3-4 weeks, then I suggest the “Use of Other Auto Endorsement” M-0051s to remove the regular use exclusion from the MAP.

    Consent of Owner – You and household members can use vehicles you do not own IF you have the consent of the owner, not some other “user” that hands you the keys. If you or household member rent a vehicle and violate the contract, this could be construed as “losing consent of the owner” and give the MAP carrier an excuse to deny a claim.

    Again, Parts 7,8,9 only pay actual cash value. If the rental company wants a higher payment or other expenses, there can be a problem under the MAP. Hence one reason why “liability assumed under contract” was added to Parts 7,8,9 under the 2016 MAP.  The insured signed the contract and made guarantees. The insurance company did not.

    There are other older Tech Talks discussing issues involved in renting vehicles. Feel free to “search” our Mass Agent website.

    All exclusions that apply to “your auto” will also apply to any auto used by you or a household member. We bring coverage, exclusions and limitations with us.

    But, I GUARANTEE you that for DECADES the MAP, all the editions, have covered you and household members when you have rented or borrowed a vehicle REGARDLESS of whether the “your auto” on the coverage selections page was being used at the same time.

    When someone tells me that the policy only follows you if your auto is inoperable/not being used, then I know that they have not gotten past Page 2 of the MAP and the definition of “your auto.”  The MAP is 34 pages long!


     

    Please remember that part of MAIA service is answering questions and providing information. Please feel free to email me when you have a coverage question, problem or issue. Perhaps I can help – at imorrill@massagent.com

    This article has been developed expressly for the members of MAIA. 
    Reprint by other than members without the express permission of the author is not permitted.


    Thank You Partners 2018

     

    Topics: Tech Talk

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