Thanks for the message.
Supplemental Liability Insurance (SLI or LIS)
only applies if there is an underlying state minimum liability insurance in place. For example in California the state minimum liability is $35K. In every state rental car companies are required to ensure that their vehicles have the state minimum liability in place (they generally self insure this amount)
The being said, recently there was a federal court ruling that reinforced the conclusion that rental car companies are not vicariously liable for injury to other persons or property.
What does that mean? Well in principle if you rented a car and injured another person, the rental company would be liable to pay the claim up to the state minimum
i.e. $35K in California, though technically they could potentially seek to recover those state minimum costs from the driver too.
Let's say for example you purchased SLI and ended up causing $500K in liability damages. The rental company would be responsible to initially pay for the state minimum liability and your SLI coverage would cover the balance. And like I said, the rental company could potentially try to recoup the state minimum from you. (we've not heard it happen but our understanding is that it's legally a possibility)
That's why we are a couple weeks away from offering a primary liability insurance on the Bonzah.com
website and the Bonzah iPhone App
. This would allow you to buy primary liability up to the state minimum level, and combined with your SLI coverage - you would be fully covered for any liability up to the aggregate of $1M, provided you drove the rental car within the T&C's of the rental contract.
I hope that clarifies. Please let us know if we can be of further assistance.