A recent lawsuit brought to the United States Court of Appeals, Ninth Circuit clarifies the breakdown of insurance coverage when dealing with supplemental rental car insurance. In Auto Rental News, the article “Lawsuit Highlights Responsibilities of Rental Car Supplemental Insurance” explains the recent lawsuit between Vigilant Insurance Company/GEICO and Lincoln General Insurance Company/DTG Operations.
A man driving a rental car in Las Vegas was involved in a car crash. He had purchased supplemental insurance from the rental company, Dollar Thrifty Group (DTG). This insurance had coverage from DTG and supplemental liability insurance from Lincoln. Compare car insurance that you purchase from a rental company before assuming that they will cover any problems. Lincoln fought paying the balance after DTG’s coverage was exhausted with the argument that the driver’s private insurance, GEICO, should exhaust their coverage before Lincoln.
The court disagreed and forced Lincoln to pay back the money covered by GEICO and Vigilant, which totaled $500,000. Basically the court said that it didn’t make sense for Lincoln’s supplemental coverage not to kick in until after the driver’s personal car insurance. They said that Lincoln was falsely representing their coverage to DTG which could cause problems in the future. What would really be the point in purchasing supplemental insurance if your personal insurance paid the accident bill anyways? Companies like GEICO or Donegal Insurance and its subsidiaries would have to raise rates to cover the cost of paying for insurance that was supposed to be covered by a supplemental plan.
