I’d like a detailed explanation of insurance and protection provisions
posted this on March 16, 2012 07:43
RelayRides protects owners, renters and third parties, addressing both liability and physical damage exposures.
A. Liability policy addresses three components, and the insurance is provided according to the following terms:
Bodily injury and property damage to third parties: the policy provides a $1,000,000 combined single limit per occurrence for owners, designed to be on a primary basis. Renters are also covered as part of this $1,000,000 combined single limit, but this coverage is secondary to any other policies the renter may already have.
PIP (short for “Personal Injury Protection”, or sometimes called “first party benefit” or “no-fault”): the renter has the benefit of the statutory minimum required in the state where the vehicle is registered, which in many instances may be zero. This coverage varies by state, and typically addresses medical expenses, loss of income, funeral expenses and similar expenses for the driver or passengers in the vehicle without regard to fault. PIP is not applicable in all states. RelayRides has either waived this coverage entirely or subscribed to the lowest limit allowable by state law, and members are bound by such election and agree to be so bound, as per the Terms of Service.
UM/UIM (“Uninsured or Underinsured Motorist"): This coverage will pay the renter or the renter’s passengers for bodily injury caused by an uninsured driver, hit and run driver, a driver whose limits of liability have been exhausted, or a driver whose insurer is insolvent. Once again, RelayRides has either waived this coverage entirely or subscribed to the lowest limit allowable by state law, and members are bound by such election and agree to be so bound, as per the Terms of Service.
* Note: In some states, certain owners’ coverages may continue to stay with the vehicle, even during the rental period. For example, in NY, the UIM/UM, PIP and liability coverages “follow the vehicle”, and so in the event of an accident, the owner’s insurance could be implicated. RelayRides, through its third party insurer, provides the statutory minimal UM/UIM coverage in all states, which may sometimes be zero.
B. Physical Damage protection includes two categories of “covered perils”: comprehensive and collision.
Collision: this is when two vehicles hit each other, or when a single vehicle hits an object.
Comprehensive: other property damage to the car that isn’t a collision – theft, fire, animal impacts, vandalism, falling objects and acts of nature (windstorm, flood, etc.)
Owner: If the car suffers collision damage, or certain comprehensive damage (comprehensive damage other than resulting from acts of nature), including intentional damage caused by the renter, during the rental period, the owner is protected against the property damage to the car, and will receive compensation up to the actual cash value of the car. Coverage excludes all pre-existing damage, normal “wear and tear” of the vehicle, aftermarket items, and any personal items left in the car. In the case of “acts of nature” comprehensive damage (e.g., flood, earthquake, hail, windstorm, etc.), the owner will receive protection identical to whatever pre-existing comprehensive coverage the owner has in effect for the car immediately prior to the rental. The owner's protection is not affected by whether and how much RelayRides may collect from renters or other third parties.
Renter: The renter is responsible to return the car on time and in essentially the same condition it was in when they first received it. If there is damage to the car at the end of the reservation, unless the renter has notified RelayRides of pre-existing damage by e-mailing pictures and a description to firstname.lastname@example.org at the start of the reservation, or has documented an agreement with the owner regarding pre-existing damage by using our “trip checklist” or similar means, the renter is primarily responsible for all damage. Any physical damage protection that RelayRides offers is “secondary” or “supplemental”, as further detailed at the end of the FAQ entry.
The renter can choose from 3 options to satisfy their physical damage obligations.
“Premium” Package: The renter’s out-of-pocket exposure is limited to payment of a deductible of $500. When damage is reported, the renter will be charged $500, and if the total costs (direct costs of damage, plus all “Related Costs”, as defined below) are less than $500, the renter will be refunded the difference.
“Basic” Package: The renter’s out-of-pocket exposure is limited to a payment of a deductible of $2500, under the same structure described in the Premium package.
“Decline Coverage” Package: The renter’s financial responsibility is essentially unlimited, and is bounded only by the actual cash value of the car, plus all Related Costs. This means that if the car is lost, stolen, or damaged so extensively that the expected cost of repairs exceeds 75% of the actual cash value, the renter is responsible to pay the entire actual cash value of the car, plus all Related Costs, minus any residual salvage value.
Many people incorrectly believe that they have full coverage through a personal insurance policy or credit card offering that will cover this exposure. Please carefully check the terms and conditions of those policies and consult with your credit card company before assuming that you are covered and selecting the “Decline Coverage” option -- it is highly unlikely that you would be covered by any credit card insurance when you rent cars through the RelayRides marketplace. Please also see this FAQ entry on the topic.
For both the Premium and Basics packages, if the renter has violated the Terms of Service, engaged in any Prohibited Uses or otherwise intentionally, recklessly, or with wanton disregard, misused the car, the deductible limits described above will not apply and the renter will be liable for physical damage up to the actual cash value of the car, in addition to all Related Costs.
Furthermore, if the renter causes damage to the interior of the vehicle or causes mechanical damage (not normal “wear and tear”), the protections described above do not apply, and the renter will be liable for the full cost of the repairs or replacement, as well as Related Costs.
"Related Costs" may include all costs and fees permitted by law, including but not limited to, estimation or appraisal costs, storage fees, towing fees, repair or replacement costs, registration or transfer taxes, claims processing costs and all similar or associated costs, minus any residual salvage value that is collected. Claims processing costs vary, but are typically $550 per claim. If a third party accepts total fault for the claim and that third party’s insurer processes it on behalf of the owner without substantial processing by RelayRides’ third party claims administrator, the renter will be refunded the claims processing fee.
The Premium and Basic packages are “supplemental” or “secondary” to any existing coverage the renter may have available through other sources (whether through a credit card, personal automobile, or other policy). In practice, this means that the renter is primarily liable, but can satisfy their obligations through these other sources, such that RelayRides will first collect the relevant deductible directly from the renter, and then will seek reimbursement (“subrogation” in insurance terms) from the renter’s other sources for the total amount of liability.
If you have additional questions regarding selecting among these options, please consult your insurance professional, or e-mail us at email@example.com, and we will direct you to our broker.