Legal Memorandum: Coverage Requirement for a Vehicle Lessor

Issue: Under Florida law, what insurance coverage is required of a vehicle lessor?

In order to avoid any liability, a vehicle lessor must prove compliance with the Florida Statutes.  The statute provides that coverage on leased vehicles must be maintained at 100/300/50.  Fla. Stat. Ann. § 324.021(9)(b) (1999).  Specifically, the statute provides:

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, shall not be deemed the owner of said motor vehicle for purposes of determining financial responsibility for the operation of said vehicle or for the acts of the operator in connection therewith; further, this paragraph shall be applicable so long as the insurance required under such lease agreement remains in effect.

Id.  If coverage exists in accordance with the statute, then the lessor is absolved of liability.  If no appropriate coverage existed, an action against the lessor may be pursued.   

The Florida Supreme Court decision in Ady v. American Honda Fin. Corp., 675 So. 2d 577 (Fla. 1996) holds that parties seeking to invoke the protection of § 324.021(9)(b) must demonstrate “strict compliance” with the statute’s provisions.  […]