Rental car insurance is confusing. It is important to know when your insurance provides coverage for the rented vehicle, and under what circumstances that coverage may be limited. The answers to these questions may depend on the language of your own automobile insurance policy. One important fact is whether your car is "disabled" and "withdrawn from use" rather than when you simply are concerned that it may be on the brink of becoming disabled or possibly in need of repair. If your rented car is involved in a car accident, questions may arise as to whether your own insurance policy will still cover you for bodily injury liability (if you cause injury to someone), uninsured motorist coverage (if you become injured due to the fault of an uninsured driver) or underinsured motorist coverage (if the at-fault driver carries an insufficient amount of liability coverage, and you are injured)in an accident.
Many automobile insurance policies have a Substitute Vehicle Clause, which provides coverage for a "temporary substitute vehicle" when the insured vehicle is not in "normal use" or has been "withdrawn from normal use." When your vehicle meets the requirements of a Substitute Vehicle Clause, the rental is covered to the same extent as your own vehicle. In Economy Fire and Casualty Company v. Dean-Colomb, the court found that a vehicle is withdrawn from normal use because of breakdown, repair, servicing, loss, or destruction. Economy Fire and Casualty Company v. Dean-Colomb, 269 Ill.App.3d 603 (4th Dist. 1995). Simply fearing that a car is unsafe for use without it being inoperable or taken to a shop for service is insufficient to qualify for a coverage through the Substitute Vehicle Clause. Economy Fire and Casualty Company at 608.
However, damaged tires, a broken wheel bearing, or a flat tire have been shown to constitute "breakdowns" for Substitute Vehicle Clauses. The policy behind enforcement of these clauses is to prevent an insurance company from being liable for two vehicles while the insured pays only one premium. If the insured is unable to get the covered vehicle to a shop for repairs, but seeks out a place to do the repairs, this may be enough for a court to determine that the vehicle was withdrawn from normal use, thus triggering the . Standard Mut. Ins. Co v. Sentry Ins. Of Illinois, Inc., 146 Ill.App.3d 905, 911 (1st Dist. 1986).
When the rental company has used another means of insuring their vehicle, there are no black letter rules for determining which policy is primary. The court will examine both the renter's personal policy and any policy with the rental company. The provisions of each contract will be interpreted in accordance with contract principles and the court will decide which policy is primary.
Many insurance policies also contain an "other insurance" clause which places that policy as an excess policy and the other insurance as the primary policy. However, if both the renter's personal policy and the rental policy both contain one of these clauses, the court will apply rules of insurance policy construction to determine which policy is primary.
A significant concern when renting a car is whether the insurance provided by the rental company covers uninsured or underinsured drivers. When a rental company elects to insure the vehicle through self insurance, it is not required to cover uninsured/underinsured claims. This is because the rental company is not actually issuing an insurance policy. In Robinson v. Hertz Corp., the renter did not have personal car insurance, and was struck by an unidentified driver. Robinson v. Hertz Corp., 140 Ill.App.3d 687, 687 (3rd Dist. 1986). Because Hertz was self insured, it did not offer uninsured motorist coverage on rental vehicles. Id. at 688. The court held that Hertz was not required to do so under Illinois law and granted summary judgment for Hertz. Id. at 688-89. This case demonstrates why having your own insurance is very important. If you are injured by an uninsured or underinsured driver, the only way to protect your right to just compensation is through your own insurance carrier's uninsured/underinsured coverage.
If you or someone you know was in an accident due to the negligence of another while driving a rental car, it is important to seek the advice of an experienced attorney. Only an experienced attorney can help you to determine what options are available for you to receive just compensation for your injuries.
