junior2708
New member
Exotic Car Rental Damage Claim DENIED?
Looking for someone who knows auto property damage insurance claims / experience interpreting auto policy or any case law regarding car rentals…..
This will be a long one. I need to keep some things vague but -
My friend owns an exotic car rental company. One of the vehicles in the fleet is a Ferrari that is involved in this incident.
May of last year, “Bob” rented the Ferrari , provided a valid insurance policy to cover damages, should there be an accident during his rental period. Bob brought the car back with dents and scrapes, and a ripped seat. Upon further review, my friend found a reckless driving ticket inside the car for Bob’s 18 year old son. Turns out Bob allowed his son to take the Ferrari for the weekend, which is against the rental contract.
Damage was noted on the contract and upon driving, it was evident the transmission was not functioning. The car was dropped off at Ferrari dealership the next day and they confirmed that due to the handling of the vehicle during this rental period, caused the transmission to overheat and malfunction, in their words, due to “abuse of the vehicle”. We have this in writing from the Ferrari dealership , along with an estimate to repair part of the transmission.
The claim was reported to Bob’s insurance, Geico. For the transmission damage and the exterior/interior damage. Mind you, this was in May 2023 and this is still ongoing.
Geico refused to come see the car for their own estimate and said we just had to send them an estimate. Even after requesting an adjuster multiple times. They verbally agreed to pay for damages at that point and said “fix the car, we will send you a check afterward” we have a voicemail of this. I worked for auto claims so I know this was completely mishandled and geico acknowledges they mishandled the initial reporting of the claim.
The car sat in the shop for almost 9 months (a whole separate issue, as the shop was not equipped to fix it and kept receiving the wrong parts) so it ended up being taken to another shop. This shop confirmed the transmission needed to be completely replaced, making a $10,000 claim a $65,000 claim.
Geico adjuster finally comes out and agrees about transmission damage. Writes estimate and includes all exterior dents and transmission. Wrote cause of damages “vandalism”.
Geico sent my friend a denial letter on the basis of “we don’t cover mechanical failure” as it’s a policy exclusion.
My friend was making the argument that this is vandalism, as the person who was driving the vehicle at the time renter gave the vehicle to someone who is not on the rental contract, who is not even on their own policy as his son doesn’t even live with him.
In further discussion with Geico, the supervisor who denied the claim did not reach out to the auto tech, did not even look at the estimate because she didn’t know there were also dents on the car and a ripped seat. She said she would “look into the dents” and continued to state “we don’t cover mechanical damage unless there’s a collision involved”. She also refused to send his written policy in full and only sent a couple sentences involving mechanical damages.
There’s no question as to who is liable for the damages but my questions are:
Is there a permissive use issue here? My friend didn’t grant the son permission to have this rental. Can Geico deny the claim further based on the fact that the son wasn’t even supposed to be driving the vehicle? Should we backdate a police report reporting the car as stolen? We still have the physical reckless driving ticket written to the son.
Can/should these damages qualify under comprehensive coverage, as this is vandalism by a person who was operating the vehicle without consent of the rental company?
My friend wants to avoid filing suit as the renter likely has $0 to pay once a judgment is made.
Cannot use the Ferrari primary coverage due to a policy exclusion that they will not cover any physical damage incurred during a rental period. (Does uninsured motorist coverage come into play if Geico continues to deny?)
Any and all help is appreciated.
Looking for someone who knows auto property damage insurance claims / experience interpreting auto policy or any case law regarding car rentals…..
This will be a long one. I need to keep some things vague but -
My friend owns an exotic car rental company. One of the vehicles in the fleet is a Ferrari that is involved in this incident.
May of last year, “Bob” rented the Ferrari , provided a valid insurance policy to cover damages, should there be an accident during his rental period. Bob brought the car back with dents and scrapes, and a ripped seat. Upon further review, my friend found a reckless driving ticket inside the car for Bob’s 18 year old son. Turns out Bob allowed his son to take the Ferrari for the weekend, which is against the rental contract.
Damage was noted on the contract and upon driving, it was evident the transmission was not functioning. The car was dropped off at Ferrari dealership the next day and they confirmed that due to the handling of the vehicle during this rental period, caused the transmission to overheat and malfunction, in their words, due to “abuse of the vehicle”. We have this in writing from the Ferrari dealership , along with an estimate to repair part of the transmission.
The claim was reported to Bob’s insurance, Geico. For the transmission damage and the exterior/interior damage. Mind you, this was in May 2023 and this is still ongoing.
Geico refused to come see the car for their own estimate and said we just had to send them an estimate. Even after requesting an adjuster multiple times. They verbally agreed to pay for damages at that point and said “fix the car, we will send you a check afterward” we have a voicemail of this. I worked for auto claims so I know this was completely mishandled and geico acknowledges they mishandled the initial reporting of the claim.
The car sat in the shop for almost 9 months (a whole separate issue, as the shop was not equipped to fix it and kept receiving the wrong parts) so it ended up being taken to another shop. This shop confirmed the transmission needed to be completely replaced, making a $10,000 claim a $65,000 claim.
Geico adjuster finally comes out and agrees about transmission damage. Writes estimate and includes all exterior dents and transmission. Wrote cause of damages “vandalism”.
Geico sent my friend a denial letter on the basis of “we don’t cover mechanical failure” as it’s a policy exclusion.
My friend was making the argument that this is vandalism, as the person who was driving the vehicle at the time renter gave the vehicle to someone who is not on the rental contract, who is not even on their own policy as his son doesn’t even live with him.
In further discussion with Geico, the supervisor who denied the claim did not reach out to the auto tech, did not even look at the estimate because she didn’t know there were also dents on the car and a ripped seat. She said she would “look into the dents” and continued to state “we don’t cover mechanical damage unless there’s a collision involved”. She also refused to send his written policy in full and only sent a couple sentences involving mechanical damages.
There’s no question as to who is liable for the damages but my questions are:
Is there a permissive use issue here? My friend didn’t grant the son permission to have this rental. Can Geico deny the claim further based on the fact that the son wasn’t even supposed to be driving the vehicle? Should we backdate a police report reporting the car as stolen? We still have the physical reckless driving ticket written to the son.
Can/should these damages qualify under comprehensive coverage, as this is vandalism by a person who was operating the vehicle without consent of the rental company?
My friend wants to avoid filing suit as the renter likely has $0 to pay once a judgment is made.
Cannot use the Ferrari primary coverage due to a policy exclusion that they will not cover any physical damage incurred during a rental period. (Does uninsured motorist coverage come into play if Geico continues to deny?)
Any and all help is appreciated.