You are on vacation, and like most people you rent a car. As part of the rental process, you show the agent at the counter your driver’s license. You are asked, “are there going to be any other drivers of the vehicle?” and you say “no, just me” before leaving with the car. The question you should be asking is: if you are renting a car, do you know your rights?
Now let’s say you are traveling with a spouse, a friend, a significant other, or any other properly licensed driver, and they ask you if they can take the car just to “pick something up; they’ll be right back”.
Now let’s say that the unregistered driver of the rental car gets into an accident and causes damage to a third party or to the car you rented, which you know would be completely covered if you were the driver.
The insurance company now tells you that you are personally responsible for the damages to the car and/or third party because you let “an unauthorized” person driver operate the rented car.
DON’T FALL FOR THAT LINE! Under New York State Law, you are protected.
New York State Vehicle and Traffic Law (VTL) section 370 requires rental car companies to provide insurance for their vehicles, including minimum liability coverage for bodily injury. The VTL further requires that such insurance “insure to the benefit” of the permissive user of the vehicle.
The New York State Court of Appeals held in MVAIC v Continental Nat’l. Am. Group Co. that where the lessee of a rental vehicle PERMITS another person to operate it, the rental company is deemed to have constructively consented to such use, and here is the important part, folks, that is EVEN WHERE THE LEASE VIOLATED THE RENTAL AGREEMENT BY ENTRUSTING THE RENTAL CAR TO ANOTHER.
In following the lead of the Court of Appeals, the Appellate Division of the State of New York, stated in Lancer Ins. Co. v Republic Franklin Ins Co., the fact the lessee was the only individual expressly authorized to operate the rental car in the case does not make the driver a non-permissive.
Know your rights? Do not assume the insurance company of the rental car company is protecting you or your rights.
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“Renting a Car, Know Your Rights” was written by Michael B. Schulman, Managing Attorney.