Ohio Subscriber

A

You propose two situations. First, the friend. There is a problem with coverage here even before the reasonable belief exclusion is reached. The liability insuring agreement on the personal auto policy (PAP) gives the named insured and family member's coverage for the use of any auto. Coverage for any other person is based on “your covered auto.” A car rented at the airport does not fit the definition of “your covered auto” as it appears on the PAP. So, the question is: is the friend an insured under the named insured's auto policy? The answer is no, and so the policy would not give the friend liability coverage, regardless of the exclusion. The named insured renter has coverage for liability in this instance should he be brought into a claim or lawsuit, based on the wording of the insuring agreement and the fact that no exclusions bar coverage for the named insured. (The friend could look to his own PAP.)

Second, the family member. The family member is an insured for the use of any auto, but does the reasonable belief exclusion come into play? Does the family member have a reasonable belief that he is entitled to use the vehicle? This depends on what the named insured tells the family member about the rental car.

If the named insured simply says “the rental car insurance does not apply to you,” that says nothing about the use of the car. The family member may logically think that the named insured has the car and the personal auto policy is applicable, so who cares about the rental insurance policy? The family member may think that since he uses the family car whenever he chooses, there is no difference.

On the other hand, if the named insured says “you (the family member) are not signed up to use the rental car so don't use it,” then, the family member should not reasonably believe that he can use the rental car.

If the named insured says nothing or is vague about the subject, then the family member probably has a reasonable belief that he can use the rental car if he uses the regular family car whenever he wishes.

There is no definite answer here because only the named insured and the family member know how driving cars is treated in that family; that is, whether any family member can use any car at any time, or whether there are restrictions. In any case, if an insurer tries to deny coverage under the personal auto policy of the named insured due to the reasonable belief exclusion, it would probably have a tough time proving the exclusion applies.