How Are Rental Expenses Covered in a Not-at-Fault Accident?
An insured is in a no-fault accident and did not purchase any rental reimbursement. They only relied on the Uninsured Motorists Property Damage coverage in their own policy, which in California, is a maximum available of $3,500. The insured needed to rent a vehicle and given the nature of the loss, the time to repair the vehicle, and the cost of the rental, the claim exceeded the limit available. The coverage to the vehicle was being paid under the vehicle’s collision coverage. Is there any solution?
Mover’s Choice does have the ability to offer Rental Reimbursement. The vehicle must have physical damage coverage and the coverage designated for the specific vehicle where Rental Reimbursement is to apply. Coverage is purchased based on a daily rental amount and number of days. For example, you can purchase coverage for $100 a day for 90 days. This requires the expense for the rental of an auto be incurred due to a loss covered under the policy (Reference is form number CA 99 23). With our AmTrust policy, the maximum daily amount is $250 and the number of days cannot exceed the policy term (Applicable on a mid-term addition). A deductible does not apply.
There is a charge for this, and it is based on a combination of factors including the ones noted above. It is our recommendation that an insured look at this in terms of supplementing their own budget for this expense. Let me give you an example to explain why:
In terms of premium, it can vary just as much as auto rates vary from vehicle to vehicle and territory to territory. We looked at a heavy truck in California and used $250 a day, for 365 days. The cost was about $9.50 a day, per vehicle. For the same vehicle in the same territory, at $100 a day for 365 days it will cost $4.00 a day. That is $3,500 or $1,500 in terms of annual premium, respectively. A shorter period of time, or lesser daily amount can be selected, and you do not need to purchase the coverage on all vehicles. Again, this is just an example, and the rates will vary across the country.
We want to thank Jake Leonard with Full Draw Insurance Services LLC, California who submitted the Coverage question of the Month for January!
If interested, please ask your underwriter for a quote. ACORD has a spot to request the coverage on the vehicle schedule.
Written By: Terri Moran
Terri’s career spans many years with roles in Leadership, Underwriting and Marketing. She was responsible for one of the largest Moving & Storage programs nationally, serviced by dedicated Moving & Storage brokers. In her spare time, in addition to enjoying her family, she is a member and Past Chair of the Board of Directors for the Surplus Lines Association of California.
