GEICO and loaners

[robc]

Has anyone had an issue with GEICO as their policy specifically states they become a secondary insurance with loaners? The dealership's primary insurance on the loaner fleet has a $5,000 deductible and the customer is apparently stuck with it.

[fburrows]

Rob:

Maryland has a requirement that you inform a customer who rents a replacement vehicle that their insurance will cover the rental and that they are not required to take the CDW.

Since I have been out of a dealership for a while and I have Geico insurance, I sent them an email and this is their answer:

Your policy coverage, including liability, will extend to the rental vehicle as long as you are renting a vehicle under the following circumstances:

- The vehicle will be rented in your name and/or your spouse's name only.
- The drivers of the rental vehicle must be household members listed on the policy prior to renting the vehicle.
- The vehicle will be rented for 30 days or less.
- The vehicle will be used for personal use only; no business use is covered.
- The vehicle is rented in the United States, its territories, and Canada only

I think this is probably an issue that varies state to state.

One problem is a rental customer that does not own a car. Like a dealership manager who has a company car but does not own a personal car. If they rent a car they can be subject to huge deductibles and should take the optional CDW or be sure to use a credit card that covers the deductible.


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Frank Burrows
fburrows@absdata.com

[robc]

Yes, rentals do not seem to be a problem - the problem comes from no-charge loaners. It seems that GEICO has a seperate clause for loaner vehicles.

[fburrows]

Rob:

Must be a state thing. I asked again about my policy and this was their response:

"Thank you for using GEICO's online services. Yes, you would have coverage for the loaner vehicle while your vehicle is in the shop."

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Frank Burrows
fburrows@absdata.com

[X476]

We just ran into this. Our DP "loaned out" Car to a customer who promptly did about $4500 in damage. We called his insurance company, they said if it was a rental they would pay but a loaner was on us. $1,000 deduct which I'm sure my dept will pay part of!

[texaslp]

X476, someone neds to fight that one. If you loaned a vehicle because their's was in the shop, their insurance should be primary coverage. Now if the DP loaned his friend a cadillac to take his daughter to the prom-different thing. Also if a loaner is done on a borrowed vehicle agreement, the customer agrees to pay any deductibles etc. If your store is not using BVA's, this would be a good case in point to implement the use of them.

[rob000711]

Most insurance companies will not cover dealership loaners. The dealerships insurance coverage becomes the first coverage. The answer is to provide rental cars to customers then cover the fee with signed agreements or coupons. Don't forget liabilities involved beyond vehicle damage.