Uninsured Losses and Liability

Question 1

What is an uninsured loss?

Answer 1

Damage that occurs when the vehicle is in a non-income producing state. These losses are expensed to the branch as an OX

Question 2

What are some examples of uninsured loss?

Answer 2

• Undocumented damage
• Missed damage
• Gained with damage
• Employee loss
• Lot damage
• Conversion

Question 3

What is the uninsured loss account for undocumented damage?

Answer 3

Account 559

Question 4

How is the branch hit for undocumented damages?

Answer 4

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)

Question 5

What is the best way to control undocumented damage?

Answer 5

Accurate and complete trunk to trunk inspections at the time of rental and return

Question 6

What is the uninsured loss account for conversions and lot damage?

Answer 6

Account 557

Question 7

What type of uninsured loss is the majority of all uninsured losses?

Answer 7

Undocumented damage

Question 8

What is an employee loss?

Answer 8

When an employee damages a vehicle

Question 9

What is the uninsured loss account for employee loss?

Answer 9

Account 558

Question 10

How is the branch hit for employee loss damages?

Answer 10

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)

Question 11

What is the uninsured loss account for employee accident damages?

Answer 11

Account 541

Question 12

How is the branch hit for liability damages resulting from an employee accident?

Answer 12

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

Question 13

What company handles the liability side of an employee accident?

Answer 13

Enterprise Risk Management/Loss Control

Question 14

In Washington State, by law, are rental car companies required to provide liability to renters as primary or secondary coverage?

Answer 14

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

Question 15

What are we liable for financially when covering 3rd party liability in Washington?

Answer 15

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

Question 16

How are the liability reserves calculated?

Answer 16

3 year rolling average of loss history, adjusted annually

Question 17

What is an unlimited financial liability exposure?

Answer 17

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

Question 18

What are the 5 unlimited financial liability exposures?

Answer 18

• Negligent entrustment
• Gross negligence
• False arrest
• Third party disclosure
• Employee accident

Question 19

What is negligent entrustment?

Answer 19

Renting to a person who is incapable of safely operating a vehicle (intoxicated, no license, etc)

Question 20

What is gross negligence?

Answer 20

When we knowingly rent an unsafe vehicle to a customer (bald tires, TPMS light, LOFR, etc)

Question 21

What is false arrest?

Answer 21

Reporting a vehicle stolen resulting in arresting a legal, authorized driver

Question 22

What is third party disclosure?

Answer 22

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