State Farm Insurance Coverage for Non-Owned and Temporary Substitute Vehicles

Liability and physical damage coverage for a Non-Owned Car acts as excess coverage. While policy language dictates a proportional contribution when other excess policies exist, Kentucky case law (Ky. Farm Bureau Mut. Ins. Co. v. Shelter Mut. Ins. Co.) establishes that the policy covering the vehicle itself is primary. Coverage for property damage is limited to the Kentucky state minimum of $25,000, regardless of whether the vehicle is a loaner.

Liability coverage for a TSC provided by a car business is primary. If multiple primary sources exist, costs are shared proportionally. When damage occurs to a TSC, physical damage coverage is applied first; out-of-pocket costs like loss of use or administrative fees are covered by liability insurance up to the $25,000 state minimum. If no physical damage coverage exists, the liability policy covers these costs up to the full policy limit.

State Farm is primary for Enterprise rentals due to regulations. Enterprise waives loss of use and diminished value fees in specific first-party or internal State Farm claimant scenarios. For Hertz, there is a contractual obligation to pay for damage to the rental vehicle under physical damage coverage, or under liability coverage (coded to 200 COL) if physical damage coverage is absent.