OAIN: Court Decision Underscores Complexity of Rental-Car Insurance Issues

    RANCHO CUCAMONGA, CA, January 12, 2012 /24-7PressRelease/ -- Online Auto Insurance News (OAIN) reports that this week's federal court decision regarding the legal liability of insurance companies for damages caused by unauthorized drivers of cars rented by their policyholders should prompt anyone planning to rent a vehicle to read the paperwork closely and understand what they're signing.

The 11th Circuit Court of Appeals on Monday ruled in a case concerning auto insurance in Florida that GEICO is liable for damages resulting from a fatal crash caused by one of its policyholders who was not authorized to drive a car rented by his brother. The court's decision hinged on the legal definition of "the permission of the owner" to drive a vehicle.

GEICO had successfully argued in lower courts that, because policyholder Edgar Baena was not specifically identified as an authorized driver on the rental agreement, his use of the vehicle revoked the permission of the rental company and removed any obligation for GEICO to pay.

Baena and other appellants, however, countered that Baena had been granted permission to operate the vehicle by his brother, who had been entrusted with the car by Enterprise Rent-A-Car.

The appellate court agreed that the unauthorized use of the car did not revoke the permission granted by Enterprise and sent the matter back to a district court for further proceedings.

Source: http://www.ca11.uscourts.gov/unpub/ops/201012825.pdf

The case underscores some of the complex issues surrounding liability for accidents involving rented automobiles. Insurance industry experts say properly insuring a rental can be a hassle, and many consumers have never wondered whether their private automobile insurance coverage will apply before they're ready to take the keys. But making sure you are properly covered for damages caused by you or another driver could help you avoid a major headache.

Industry experts advise potential renters to read their private vehicle policies closely beforehand to check exactly what is covered, including rental cars, and what the coverage limits are.

To learn more about this and other coverage issues, readers can go to http://www.onlineautoinsurance.com/florida/ where they will find informative resource pages and a helpful rate-comparison generator.

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