The U.S. District Court for the Eastern District of Pennsylvania has rejected a claim for underinsured motorist coverage brought by an individual who rented a car and purchased supplemental liability protection, holding that the insurance the renter purchased did not include underinsured motorist benefits.
The Case
When Richard Warrick rented a vehicle from Enterprise Leasing Company of Philadelphia, LLC, he purchased supplemental liability protection (“SLP”), which included excess liability coverage through a supplemental rental liability policy issued by Empire Fire and Marine Insurance Company to Enterprise Holdings, Inc.
Mr. Warrick was driving the rented vehicle when another driver struck him. Mr. Warrick alleged that the other driver was underinsured. After the accident, Mr. Warrick made a claim against Empire for underinsured motorist benefits pursuant to the SLP.
Empire denied Mr. Warrick's claim after concluding there was no uninsured or underinsured motorist coverage under the policy.
After his underinsured motorist claim was denied, Mr. Warrick sued Empire, alleging that it breached its contract with him and that it had denied in bad faith his underinsured motorist claim.
Empire moved for summary judgment.
The District Court's Decision
The district court granted the motion.
In its decision, the district court explained that the Empire policy provided “excess coverage” to Mr. Warrick through his purchase of the SLP.
The district court then noted that the Empire policy “explicitly” excluded coverage to injury of the renter (in this case, Mr. Warrick) and “plainly” stated that it would not cover an underinsured motorist claim.
The district court observed that the Enterprise rental agreement that Mr. Warrick signed stated that the optional SLP “exlu[ded]: . . . [a]ny loss arising out of . . . bodily injury, death or property damage sustained by” the renter, as well as “[a]ny liability arising out of or benefits payable under any[] uninsured or underinsured motorist law, in any state; or [] first party benefit law, medical payments, no-fault or any law similar to the foregoing, in any state.”
Moreover, the district court added, Empire's excess policy explained that:
In addition to the exclusions contained in the “underlying insurance”, this insurance does not apply to the following: . . . 5. Liability arising out of or benefits payable under any insured or underinsured motorists law, in any state. 6. Liability arising out of or benefits payable under any first party benefit law, medical payments, no-fault law or any similar law to the foregoing, in any state.
(Emphasis added.)
Because Empire specifically excluded coverage for underinsured motorist claims under the SLP, Mr. Warrick's claims for breach of contract and bad faith were “unfounded,” the district court ruled.
The district court also rejected Mr. Warrick's argument that even if Empire had specifically disclaimed underinsured motorist coverage, Empire was required under the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”) to provide underinsured motorist coverage. The district court simply concluded that the Empire excess policy was “not subject to the requirements of the MVFRL.”
The case is Warrick v. Empire Fire and Marine Ins. Co., No. 18-1952 (E.D. Pa. March 25, 2019). Attorneys involved include: For RICHARD WARRICK, Plaintiff: MICHAEL T. VANDERVEEN, LEAD ATTORNEY, THE LAW OFFICES OF MICHAEL T VANDERVEEN, PHILADELPHIA, PA; NELSON LEVIN, Law Offices of Michael T. van der Veen, Philadelphia, PA. For EMPIRE FIRE AND MARINE INSURANCE COMPANY, Defendant: LOUIS A. BOVE, LEAD ATTORNEY, JAY M. GREEN, BODELL BOVE LLC., PHILADELPHIA, PA.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].