What is the liability coverage owed by the lessor’s insurer in a short-term lease/rental agreement?

Under Florida law, a long term lease is characterized as one that lasts for one year or longer and a short term lease/rental is shorter than one year. The lessor (owner of vehicle who rents it to someone else) is required to provide primary liability coverage equal to the minimum required by the financial responsibility law. Currently, the legal minimum required is $10,000. So what happens if you have a lease vehicle for less than one year and get involved in an accident where the lessor told you that you would be responsible for providing your own primary liability coverage? If the company you are leasing the vehicle from provides on the face of the lease agreement, in bold, in 10 point font, a clear indication that the company (lessor) has elected to make you liable for providing primary coverage as a condition for the lease, then you will be liable.

However, if any of those conditions are not satisfied, the company will remain liable to you. Often, as a non-expert it will be difficult for you to determine if the insurance company has violated any of these provisions because you are not trained to look for these provisions. Contacting an experienced Palm Beach County accident attorney will allow you to maximize your claim against an insurance company who only has their “Bottom Line” at focus. Let a knowledgeable Palm Beach County accident attorney have your “Bottom Line” at focus! If the lessor doesn’t explicitly let you know that you will be providing liability coverage on your own, the lessor will still be on the hook. Also, when the insured has excess coverage and not primary, the lessor’s insurance must provide primary, insurance coverage. Grant v. New Hampshire Insurance Co., 613 So.2d 466, 471 (Fla. 1993).

Although, the Florida law, under F.S. 627.7263, has approved a change in primary liability coverage responsibilities from the lessor to the lessee, it was not intended to transfer the duty to defend. The Supreme Court of Florida, in Allstate Insurance Co. v. RJT Enterprises, Inc., 692 So.2d 142 (Fla. 1997), held that the duty to provide primary coverage (i.e., indemnification) was separate and distinct from the duty to defend, and thus Allstate had no duty to defend the lessor. When the lessor leases a vehicle that is covered by its insurer under the lessor’s policy, and the lessor shifts the burden of providing primary liability coverage to the lessee who only has excess coverage, when an accident occurs the lessee’s excess coverage carrier cannot be forced to assume the role of a primary insurer when the insured does not have primary insurance. The shifting of the burden allowed the lessor’s insurer to avoid responsibility and the language in the lessee’s policy allowed the lessee to avoid responsibility, thus holding the lessee liable for their own coverage. Don’t put yourself into this horrible situation after you have been involved in a car accident with your leased car. Do not hesitate to contact an experienced Palm Beach County accident attorney to handle your claim against the powerful insurance carriers! Sometimes because of vicarious liability, the policy language will not matter and the party’s liability will surmount the policy language.