Injured passengers in rental car not entitled to payment under UIM coverage
Progressive argued the plaintiffs were not insured because the rented car was not a ‘covered auto.’
The West Virginia Supreme Court reversed summary judgment in favor of two plaintiffs, finding they were not covered under the driver’s underinsured motorist (UIM) coverage because they were passengers of a rented vehicle that was not a “covered auto” under a policy written by Progressive Insurance.
In Brehm v. Progressive Max Insurance Co., plaintiffs Christine Brehm and Amber Hess — passengers in a rented Toyota Camry driven by Susan Bindernagel — were injured when another driver, Dana Miller, rear-ended the car, according to the majority opinion of the court.
Miller’s insurer, USAA, offered the women policy limits of $50,000 — to be split three ways — and did not fully compensate the women for their injuries, according to the opinion. The three women notified Progressive that they intended to make claims against Bindernagel’s UIM coverage.
Bindernagel purchased the optional UIM coverage with bodily injury limits at $25,000 per person/$50,000 per accident, the opinion said.
Progressive paid Bindernagel’s claim but denied coverage to Brehm and Hess because the rented vehicle was not a “covered auto” under the policy, the opinion said. Binder was the named insured on the policy, and the only vehicle listed on the declarations page was a 2011 Subaru Legacy, the opinion said.
Under the terms of Bindernagel’s UIM coverage, Progressive is to pay “for damages that an insured person is legally entitled to recover from the owner or operator of … an underinsured motor vehicle because of bodily injury,” and “an underinsured motor vehicle because of property damage.” Meanwhile, the policy said an “insured person” is the spouse of the named insured or a relative; any person driving the covered auto with permission of the insured or relative; any person occupying but not operating a covered auto, the opinion said.
Both sides filed motions for summary judgment in the circuit court.
Progressive argued Brehm and Hess were not “insured person[s]” under Bindernagel’s UIM coverage because the rented vehicle was not a “ covered auto,” thus they weren’t entitled to payment.
Additionally, Progressive argued that the two women did not meet the definition of “insured” under West Virginia Code § 33-6-31(c), which states “the term ‘insured’ means the named insured and, while resident of the same household, the spouse of any such named insured and relatives of either, while in a motor vehicle.”
Brehm and Hess argued that the coverage definition of “insured person” is void because it conflicts with West Virginia Code §§ 33-6-29(b) and -31(c). The plaintiffs claimed they were “insureds” entitled to coverage under Bindernagel’s UIM coverage because § 33-6-29(b) operated to extend the auto policy to the rented Camry, which thus made the Camry a vehicle to which “the policy” applied and them “insureds” under § 33-6-31(c), the opinion said.
Monongalia County Circuit Court Judge Cindy S. Scott sided with the plaintiffs, granting summary judgment in their favor. Scott held §§ 33-6-29(b) and -31(c) “require a guest passenger in a rental vehicle to be afforded underinsured motorist coverage under a policy of insurance that provides coverage to the rental vehicle in which she is a lawful passenger,” the opinion said.
Progressive appealed, arguing it was entitled to summary judgment due to the clear statutory language and the terms of Bindernagel’s UIM coverage.
The West Virginia Supreme Court agreed, holding that the plaintiffs were not entitled to payment because they were neither “insured persons” under the terms of the UIM coverage, nor were they considered “insureds” under relevant statutes.
“There is no real dispute that the rented Camry was not a ‘covered auto.’ The declaration page of the Auto Policy lists a Subaru Legacy, not a Toyota Camry,” Judge Elizabeth Walker wrote on behalf of the majority. “The Camry cannot be an ‘additional auto’ as defined in the Auto Policy, because Bindernagel had not purchased it; she merely rented it. And the Camry cannot be a ‘replacement vehicle,’ either, because there is no indication in the record that it permanently replaced the Subaru Legacy listed on the Auto Policy’s declarations page, and Brehm and Hess do not argue otherwise. So, Progressive is correct that neither woman can be an ‘insured person’ under the plain terms of the Bindernagel UIM Coverage because the rented Camry was not a ‘covered auto.’”
The plaintiffs argued that “[t]here is no question that West Virginia law renders Ms. Bindernagel’s Progressive insurance policy applicable to a vehicle she rents,” and that because § 33-6-29(b) makes the rented Camry a motor vehicle to which Bindernagel’s auto policy applies, § 33-6-31(c) “operate[s] to render the UIM cover of that vehicle applicable to [them]” as passengers. Additionally, they claimed that the legislature “ cannot have meant § 33-6-29(b) not to extend UIM coverage to an insured operating a rental vehicle because the Legislature also failed to mention UM coverage in that statute,” the opinion said.
The Supreme Court rejected these claims.
“Brehm and Hess want this Court to take a broad brush to §§ 33-6-29(b) and -31(c) to find that they are ‘insured’ entitled to payment under the Bindernagel UIM Coverage. That approach does not work in the view of the plain language of those statutes,” Walker wrote. “And more to the point, it cannot work given the purpose of UIM coverage and its optional nature. Optional UIM coverage is intended to ‘enable the insured to protect himself, if he chooses to do so, against losses occasioned by the negligence of other drivers who are underinsured.’ The corollary of that purpose? ‘Underinsured motorist coverage is not available to a guest passenger unless the statute or policy language specifically provides for such coverage.’ In this case, neither § 33-6-29(b), § 33-61-31(c), nor the terms of the Bindernagel UIM coverage specifically provide for UIM coverage to those in Brehm and Hess’s position, so the circuit court erred by entering summary judgment in their favor.”
In a separate opinion, Justice William R. Wooton concurred with the majority that §§ 33-6-29(b) and § 33-61-31(c) do not extend UIM coverage to guest passengers in a rental vehicle and that the plaintiffs are not entitled to recover under the Progressive policy. But he wrote to address “what some may perceive as an apparent inequity of the law.”
Under the policy’s language, only three vehicles would meet the definition of a “covered auto:” Bindernagel’s 2011 Subaru; an additional vehicle purchased by Bindernagel; or a replacement auto that permanently replaced the vehicle listed on the policy. A rental vehicle can never fall into one of those categories under the plain language of the policy, he wrote.
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