OT - When does a rental car become a stolen vehicle?

[DerbyDad03]

I'm going to be renting a car for a family vacation. I am trying to find the cheapest way to add my wife and 2 sons as operators and ensure that our private insurance will cover any accidents regardless of who is driving.

In order to add 3 Additional Authorized Operators (AAO), the rental company wants an extra $24/day for the 10 day trip, and that's with a considerable discount.

I asked my insurance company what would would happen if I didn't add them to the contract and one of them was involved in an accident. The answer was:

"Well that is a hypothetical situation that I can not answer directly. All I can say is that from a policy perspective they would be covered, but from a legal perspective they might not be."

That was the best that I could get out of her since it was a "hypothetical situation".

So I called the rental agency and ran it by them. The rental agent was a bit more forthcoming.

"Your auto insurance policy coverage extends to any operator that you authorize to operate a covered vehicle and your coverage also extends to rental vehicles. Therefore, if you authorize someone to operate the rental vehicle, they would be covered by your insurance.

However, in a worst case scenario, if an operator who is not listed as an AAO with the rental agency has an accident, the rental agency has the option to consider the contract null and void, which essentially turns the vehicle into a stolen car. Since it would no longer be a rental vehicle, but technically a vehicle involved in a crime, it might not be covered by your policy."

He did mention that something like that has not happened, to his knowledge, in a long, long time, but in a worst case scenario, it could. He added that, hypothetically, it was up to me if I wanted to take that chance.

[DerbyDad03]

Well, it did seem to flow smoothly from the Ins Co rep saying that there might be a "legal" issue with coverage to the rental agent explaining it in a way that took "policy coverage" out and brought the "legal status" of the vehicle in.

I had not mentioned the Ins Co comment to the rental agent until after he explained the stolen vehicle matter. After I did he said (paraphrasing) "That's why she couldn't answer the question directly. It would be up to the rental agency to first deem the contract null and void which would remove the "rental status" from the vehicle, at which point it would no longer be covered. Until that happens, the Ins Co would have to cover it."

[trader4]

What a crock, but I guess the rental companies have to dream up something to try to force you to add additional drivers. If it's a "crime" they would have to report it to the police. If they are truthful and report the actual facts, there is no way any police dept is going to consider that a "stolen" car and pursue charges.

There must be plenty of instances of folks letting someone else drive that was not "authorized" that got into an accident. How you would find them so you could see what happens, I don't know.

My best guess is that if you are NOT relying on the car company for either liability insurance or collision insurance and you have a policy that covers your family for any cars they drive, that it's not going to matter. except in some possibly extreme cases. For example, if the driver not on the contract kills a bus load of nuns, it exceeds your policy limit, they sue the rental company and you, the rental company might be off the hook. But then I would think they are pretty much off the hook anyway, unless they committed some negligence in relation to what they did.

Now if you took out insurance with the rental company and then allowed someone not on the contract to drive, I would expect they may say the insurance does not cover that driver and loss.

[dpb]

On 7/20/2012 1:00 PM, DerbyDad03 wrote: ...

Well, I think that's probably an overstatement of it becoming a "stolen vehicle" but undoubtedly in worst-case scenario their lawyer legal begals will be looking for any out they can dream up (and I wouldn't put a whole lot of trust that my insurance company would be just volunteering to go to bat for me, either) to minimize their cash outlay/liability.

So, the last part is always true--just how much risk do you feel like taking on to save another couple-hundred bucks? Of course, "accidents never happen to me" (until they do)...and the world is full of cases where somebody has gotten bit seriously. OTOH, there are a whole lot more somebodies who did something like that and got away with it unscathed..."no good deed goes unpunished" may have play here even if the "punishment" is simply writing a bigger check. :)

[Han]

I agree. This is a question of whther the additional cost is benefit enough for the rare case where you need it. I envision 2 scenarios for needing the extra drivers covered. One, you're making a long trip and would like to share the driving duties. Two, each of you four would like to "borrow" the car for your own individual purpose on your vacation, without necessarily all of you as passengers. In the former case, if something went wrong, you could claim feeling sick, and not fully up to driving, and you (plural) needed to get from point A to point B that day. "Force majeure". In the latter case, I'd make sure to get all the insurance you can.

[Evan]

I would not buy into what either of the experts you have spoken to about this issue, there are too many variables which change when you cross state lines...

Your rental agent is correct in that the PRIMARY policy holder is covered when operating a rental vehicle, that coverage does not always extend to additional insureds designated for specific vehicles under a policy... This is where you need to cover yourself and figure out how that works in the states you are going to travel through...

Your insurance agent is correct on the contract law issue, without disclosing who is going to be operating a rental vehicle on the contract, which becomes the vehicle registration document during your authorized use of the rental, if you were in an accident and the operator was not listed on that contract as an authorized operator by the rental agency (the owner of the vehicle) then you may have an operator who is in trouble for unauthorized use of a motor vehicle...

The rental company has lots of insurance on its fleet of vehicles so it is covered, however if you breach the terms of the rental agreement you would not be covered nor would your auto insurer pay out any claims for your violation of the terms of the rental contract... Expect a lawsuit for any damages caused by your allowing an operator not listed on the rental contract driving the rental vehicle and getting into an accident while behind the wheel plus any allowable damages for the breach of the contract under the state law where the rental took place, or in the state where the rental company is headquartered (there will be fine print somewhere on the contract which specifies the jurisdiction of the court which will settle all disputes which you agree to by entering into and signing the contract)...

Insurance policies which cover any operator for any vehicle are quite expensive and you would know it for sure if you had one of those in effect...

[trader4]

They can probably deem PARTS of the contract null and void. They most likely can't deem the whole thing void and prevail. Just because someone breeches part of a contract usually doesn't meant the whole thing goes out the window.

What they can't do is turn it into a stolen car, because it's not. IMO, it doesn't even meet the level of "unauthorized use", which is a lesser crime involving a car. In most cases to convict on that you have to show that the person KNEW they did not have the permission of the owner. Easy defense is, "Dad was paying the rental company and I thought I was authorized." Isn't a jury in the US that would convict, either.

I predict this thread will quickly exceed the # of posts in the thread about that failing apart door.....

[DerbyDad03]

I'll have to spend a little more time reading the rental contract, but I did find this in their FAQ:

"Additional driver not signed on contract.

What if I just allow them to drive without adding them on the contract?

Failure to add someone on the contract could result in the car being impounded if stopped by the police."

If it *could* result in being impounded, then the police would need a reason (and a law?) allowing them to impound it, wouldn't they?

As I said in my response to Oren, the Ins Co did hint at a "legal issue" with coverage of un-authorized drivers but didn't go into the details. However, the rental agent mentioned the "stolen car" status without knowing what my Ins Co had told me.

I look at it like this, at least at this point:

1 - There has to be some reason behind the Ins Co saying "the policy would cover any driver but a "legal issue" might prevent coverage" 2 - The rental agent did toss out a situation that supposedly changes the legal status of the vehicle.

Therefore, maybe the two statements are indeed connected.

However, I will point out once again that the rental agent did in fact say he has not heard of it actually happening in a long time, but that it *could* happen, in a worst case scenario.

[DerbyDad03]

quoted text -

...

Are we counting posts in just the latest "Sagging Door" thread or will we be combining the posts from all three related threads?

[DerbyDad03]

It really is just for the 15 hour drive to and from our destination.

Once we're there, I don't see a need for multiple drivers, especially for the cost.

I did find out this additional piece of information:

I can add drivers at any time just by stopping by a rental office, but once they are added, I can't take them off until the contract end date.

In other words, I can't put them on for the trip down, take them off for the week and then add them on for the trip back.

I can however, just add them on for the trip back if I'm totally exhuasted from a week of fun and sun.

I'm still working on some other discount codes to reduce the overall cost, so we'll see what happens.

[trader4]

They could impound it on the SUSPICION of it being stolen because the driver can't produce documents showing they are authorized to be driving it. That's a lot different than the rental car company declaring it to be "stolen" after an accident and you telling them that it was not stolen, just your son driving it.

I'd say the reason are they can't forsee all the possible circumstances, you're asking a legal question of some phone person that could be in India, these companies prefer to give vague answers, and the more you believe it's dangerous to not name additional drivers the more $$ they make.

[r.mariotti]

FWIW - a number of years ago before there was the embedded GPS tracking, my daughter rented a car for a week and wrote that she was driving to the beach. We live in Central Connecticut so the beach is an hours drive away. However, she drove to Myrtle Beach, SC and when she returned the car with a couple of thousand miles on it they asked her that she wrote she was going to the beach. She replied "I did go to the beach. But you didn't ask me which one."

So there you have it - drat those gps trackers...

[HeyBub]

I call BS on the "stolen car" silliness.

Your lawyer: "Did my client give you money?" Car rental company: "Yes" Your lawyer: "And did you give him the keys to the car?" Car guy: "Yes" Your lawyer: "Did you wave goodbye as he drove from your lot?" Car guy: "Yes" Your lawyer: "Did you immediately or any time thereafter report a stolen car?" Car guy: "No" Your lawyer: "Isn't it the case that you're raising this business about the car now being stolen in a futile attempt to weasel out of a monetary loss?" Car guy: "Well... I wouldn't put it exactly that way..."

If the original written contract is deemed void, we then have a verbal contract in which nothing is said about insurance or the price of rice in China.

[DerbyDad03]

How does my Ins Co make any money based on my believe that it's dangerous to not name additional drivers?

They are not even a party to the rental situation unless there's a claim submitted.

In fact, they'll never make money on the transaction, they'll only pay it out if there's a covered incident. Further, it would actually behoove them to convince me *not* to list the drivers on the off chance that they could avoid paying a claim because the driver wasn't authorized.

[G. Morgan]

You're getting screwed by the rental company. $24/day extra? That's crazy.

Except... How old are your sons? If one/both are under 25 that changes everything. Take the under 25'ers out of the agreement, shouldn't cost any extra.

[G. Morgan]

It becomes void when an unlisted driver, drives it! That's what the contract says: "who the hell *exactly* is going to be driving this thing?"

Possession is 9/10ths of the law ;-)

[G. Morgan]

Because the second a non-additional driver moves an inch behind the wheel, and you the contracted allowed it - the contract is broken right then.

It's a contract, it does not get broken when or if you get *caught*, it gets broken when an actor goes against the agreement. Even if the car is returned uneventfully, you still broke the contract. The rental company won't know it, but you will and so will your family. Kinda a slippery slope in the financial, legal, and moral aspects.

[G. Morgan]

I agree with the probable outcome, if caught.

But is this something you want to teach the kids? That it's okay to 'bend' the rules to save some money? Are you going to be able to relax while they are out driving in it, and you didn't list them as drivers? What if they end up in the pokey until you are dragged down there to sort it out?

Or is this just hypothetical?

[G. Morgan]

I hope you are not considering doing this the wrong way. It could be premeditated insurance fraud now. And there is always a chance something can go wrong, you'll be bankrupt after trying to save a couple of bills.

If the kids want to drive, make them pay the extra cost.

[DerbyDad03]

Each additional driver is $3 per day regardless of age Drivers 20 - 24, add an additional $15 per day ($18 total) Drivers under 20 - (you might want to sit down) add an additional $41 ($44) total

Spouse (25+) $3 Son 1 - (24) $3 + $15 - $15 AAA discount code Son 2 - (22) $3 + $15

$9 + $15 =3D $24

Note: They gave me the AAA discount on the young driver even though it was not a AAA rental. My corporate rate was not only substantially cheaper than AAA but came with unlimited mileage as compared to 850 miles from AAA. 850 miles barely gets us to where we're going. We'd have to walk back.

If I can pester them enough to drop the other $15 young driver fee, I'll go with $9 a day and have the piece of mind of having 4 drivers. Otherwise, I'm going with $6 and 3 drivers. I'll let the boys fight it out.