Exception to Rental Car Coverage Under Florida Personal Insurance Policy

Most Florida motor vehicle insurance policies extend coverage to its insureds for accidents involving temporary substitute automobiles. The typical requirements of the insurance policy provision are that the vehicle is used as a substitute for the owned auto when withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction AND with the permission of the owner. A substitute vehicle can include a rental car.

In Geico Insurance Company v. Shazier, So.3d , 35 FLW D539 (Fla. 1st DCA 3-10-2010), the permission element of the insurance provision was put to the test. The insured lost.

Kutusha Shazier and her husband were insureds under a motor vehicle policy with GEICO. Due to mechanical problems with her Ford Expedition, Kutasha rented a vehicle from Avis Rent-A-Car System. The rental agreement provided that only Kutasha Shazier was allowed to operate the vehicle and if the provision was violated, the rental agreement was automatically terminated.

Without permission from Avis, Shazier allowed another person to operate the vehicle. That person caused a serious accident resulting in injuries to numerous passengers and one fatality.

Shazier, the unauthorized driver, and Avis were sued by the passengers or their representatives. In turn, GEICO filed a complaint for declaratory judgment, asserting that no coverage existed because the rental car did not qualify as a “temporary substitute auto” as it was not being used with Avis’s permission.

The trial court disagreed with GEICO. GEICO appealed and won. The 1st District Court of Appeals held that the vehicle was not being operated with Avis’s permission, therefore, the vehicle did not qualify for coverage under the “temporary substitute auto” provision of the GEICO policy.

The moral of the story is to be very careful about loaning your vehicle. Although the Shazier case involved a narrow factual scenario, insurance policies are full of exceptions and carriers are more than ready to test their policy provisions.

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Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.