Adhav

*960 I. INTRODUCTION

Plaintiffs Ashish Adhav and Cullen Dickson rented cars from defendant Midway Rent A Car, Inc. (Midway) and opted to purchase insurance coverage in connection with those rentals. Because Midway is not an insurance company, Midway purchased master insurance policies from defendants KnightBrook Insurance Company (KnightBrook) and National Specialty Insurance Company (National Specialty) to make such optional insurance coverage available to its customers. Midway was the insured but was authorized to extend coverage to its customers under the policies. These policies, and the rates they charged Midway, were approved by the California Department of Insurance (DOI) as required by California law. Many of the policies were structured to include a $25,000 per claim self-insured retention (essentially, a deductible) for which Midway was responsible in case of a customer loss. KnightBrook and National Specialty became liable only if the loss exceeded the self-insured retention. Shifting some of the risk of loss to Midway in this manner lowered the premium Midway paid to the insurers. In light of the self-insured retention, administrative costs in connection *863 with…