Strategies, Challenges, and Answers

Financial Responsibility Liability Coverage Provided By Rental Car Companies Is Secondary To The Driver’s Personal Coverage Based On Language In The Rental Contract

Betty Roe rented a car from Allstate Rent-A-Car.  While driving that car, she caused an accident with injuries.  She didn’t buy any additional insurance coverage from the rental car company but she had her own personal auto insurance through Co-Operators Insurance Company.

As you may know, NRS 482.295 requires that before rental car company can be licensed, it must demonstrate that is has auto liability coverage for each car going out the door.  The rental company can either buy insurance or qualify for a certificate of self-insurance.

In Co-Operators Ins. Co. v. Allstate Rent-A-Car, 107 Nev. 17, 804 P.2d 1050 (1991), the Nevada Supreme Court addressed the question of which of these two coverages was primary over the other.  The Court found that where the legislature has given no directive, the courts should look to the individual policies to see what they say on the subject.  The Court’s examination found language in the rental contract that specifically said that the driver/renter’s personal policy would be primary.  107 Nev. at 19-20, 804 P.2d at 1052.

The obvious follow up question is what will happen if both policies say that their coverage is secondary to any other policy coverage?  That question is answered in Alamo Rent-A-Car v. State Farm, 114 Nev.154, 953 P.2d 1074 (1998) which the Nevada Law Blog discusses HERE .

Issues regarding rent-a-car coverage can be tricky.  Please call Mike at Mills & Associates, 702‑240‑6060 for help with your questions.