More details to this question:
I'm running rental car company in Michigan. I have a rental car fleet insurance covering state minimum liability & collision for rental period. However, this insurance works as secondary, and they require my customers(renters) to buy their own primary insurance if they don't have it( for example, renters from another country). If my customers don't have it, they told me they will not cover. My question is, if my customers don't buy it, is it considered as 'not having insurance'? Or, even if my insurance don't cover, is it still considered as 'having liability insurance'? In other words, is it legal to have only secondary insurance?
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Legal yes, advisable NO!.
The problem is nothing requires you to have insurance but, if the renter does not have it, YOUR insurance does not kick in as YOUR coverage only starts if the renter has a policy.
So if an uninsured renter gets in an accident, you have no coverage.
You must mandate insurance to your renters; if they claim they have a policy, you need to verify it is in force otherwise 1 accident could cost your company millions.
You really need to make sure that you are doing business in the proper corporate form and cannot be personally liable.
Answered on Apr 29th, 2024 at 8:38 AM