When someone leases a vehicle from a company such as Ford Motor Credit or GMAC, the leasing company (lessor) generally requires the person leasing the vehicle (lessee) to maintain higher limits of liability coverage. If certain limits of liability are maintained by the lessee then the leasing company is not considered to be the owner of the vehicle for the purposes of financial responsibility. Florida statutes require split limits of at least 100/300/50 or combined single limits of at least $500,000 in order for the financial responsibility exemption to exist for the lessor.

Several members have contacted FAIA stating that leasing companies were only requiring $300,000 combined single limit and asking, “What should I do?” When the leasing company states their minimum insurance requirements, the lessee should comply with those requirements. If the client asks the agency to provide the $300,000 limit specified by the lessor, then the agency should honor that request. Since the leasing company can also obtain the financial responsibility exemption by purchasing their own $1 million blanket policy, it may not be necessary for them to rely on the coverage provided by the lessee in order to gain the exemption. Additionally, there is nothing to prohibit a leasing company from requiring limits of liability that are higher than those referenced in the statute – the statutes only address the minimum limits required to gain the financial responsibility exemption.

The ultimate “decision maker” when it comes to selecting limits of liability is the insured. The coverage required by a leasing company is a minimum. The fact that a lease requires a certain limit of insurance does not mean that limit is adequate for the person who leases the vehicle; some clients may wish to go beyond what the leasing company requires and select even higher limits of coverage. The applicable statute is below.

324.021 Definitions; minimum insurance required(9) OWNER; OWNER/LESSOR.–

(b) Owner/lessor.–Notwithstanding any other provision of the Florida Statutes or existing case law:

1. The lessor, under an agreement to lease a motor vehicle for 1 year or longer which requires the lessee to obtain insurance acceptable to the lessor which contains limits not less than $100,000/$300,000 bodily injury liability and $50,000 property damage liability or not less than $500,000 combined property damage liability and bodily injury liability, shall not be deemed the owner of said motor vehicle for the purpose of determining financial responsibility for the operation of said motor vehicle or for the acts of the operator in connection therewith; further, this subparagraph shall be applicable so long as the insurance meeting these requirements is in effect. The insurance meeting such requirements may be obtained by the lessor or lessee, provided, if such insurance is obtained by the lessor, the combined coverage for bodily injury liability and property damage liability shall contain limits of not less than $1 million and may be provided by a lessor’s blanket policy. (Editor’s note: Emphasis added for “not less than” wording)

This article contains copyrighted information of the Florida Association of Insurance Agents and is used with permission.  Please call Bush-Thompson Insurance at (904)278-4288 if you have any further questions about this article.  FAIA is not staffed to take consumer calls.