Uninsured Losses and Liability Flashcards
What is an uninsured loss?
Damage that occurs when the vehicle is in a non-income producing state. These losses are expensed to the branch as an OX
What are some examples of uninsured loss?
- Undocumented damage
- Missed damage
- Gained with damage
- Employee loss
- Lot damage
- Conversion
What is the uninsured loss account for undocumented damage?
Account 559
How is the branch hit for undocumented damages?
The 1st $2500 is charged to the branch, any balance remaining is spread to the region on a per unit basis (including the offending branch)
What is the best way to control undocumented damage?
Accurate and complete trunk to trunk inspections at the time of rental and return
What is the uninsured loss account for conversions and lot damage?
Account 557
What type of uninsured loss is the majority of all uninsured losses?
Undocumented damage
What is an employee loss?
When an employee damages a vehicle
What is the uninsured loss account for employee loss?
Account 558
How is the branch hit for employee loss damages?
For physical damage to our unit, the branch is charged the 1st $2500 and any remaining balance is spread to the region on a per unit basis (including the offending branch)
What is the uninsured loss account for employee accident damages?
Account 541
How is the branch hit for liability damages resulting from an employee accident?
The branch is charged the 1st $2500. The next $22,500 is spread to the region on a per unit basis, including the responsible branch. Any remaining balance is absorbed by corporate
What company handles the liability side of an employee accident?
Enterprise Risk Management/Loss Control
In Washington State, by law, are rental car companies required to provide liability to renters as primary or secondary coverage?
Secondary. As a non-neglgent owner, we have to provide financial coverage to cover a 3rd party when primary coverage is exhausted or there is no other coverage
What are we liable for financially when covering 3rd party liability in Washington?
The state minimum financial responsibility limits are:
- $25,000 for bodily injury per person
- $50,000 for bodily injury per claim
- $10,000 for property damage per claim
- Maximum payout of $60,000 per claim
How are the liability reserves calculated?
3 year rolling average of loss history, adjusted annually
What is an unlimited financial liability exposure?
These are exposures to, literally, unlimited financial liability. This means that is we expose ourselves to these risks, we are on the hook for an indefinite amount of money via lawsuits, etc
What are the 5 unlimited financial liability exposures?
- Negligent entrustment
- Gross negligence
- False arrest
- Third party disclosure
- Employee accident
What is negligent entrustment?
Renting to a person who is incapable of safely operating a vehicle (intoxicated, no license, etc)
What is gross negligence?
When we knowingly rent an unsafe vehicle to a customer (bald tires, TPMS light, LOFR, etc)
What is false arrest?
Reporting a vehicle stolen resulting in arresting a legal, authorized driver
What is third party disclosure?
Handing out, either intentionally or accidentally, confidential information about our customers to a third party. This most often occurs by being careless with keeping contracts away from third parties
