Does Underinsured Motorist Coverage Apply to Short-Term Rental Vehicles?

If you drive a car, you know the law requires you to carry a certain amount of auto insurance. Such minimal coverage, however, is often far too little to provide full compensation in the event of a car accident. This is where having additional uninsured/underinsured motorist coverage can prove useful.

Underinsured motorist (UIM) coverage is where your insurance company steps in when the negligent driver does not have sufficient insurance to cover all of your losses, which is often the case when someone only carries the state-mandated minimum. (Uninsured or “UM” coverage applies when the negligent party has no coverage or is an unknown hit-and-run driver.) But even though you purchase UIM coverage through your own carrier, that does not mean the insurer will not put up a fight when you actually file a claim.

Indiana Appeals Court Finds Insurer Liable for Rear-End Accident

A recent Indiana Court of Appeals case, The Charter Oak Fire Insurance Company v. Dougherty, provides an apt illustration of this point. The plaintiff in this personal injury case sustained injuries in a rear-end car accident. The other driver was at-fault.

Since the negligent driver’s insurance did not cover all of the plaintiff’s injuries, he filed a UIM claim. Now there were a couple of complicating factors. First, the plaintiff did not drive a personal vehicle when the accident occurred. His employer maintained a fleet of company-owned vehicles for employee use. Normally, the plaintiff drove one of those vehicles. But his company vehicle was undergoing repairs at the time, so he was actually driving a temporary rental car.

Now, the employer’s insurance policy covered all Indiana-licensed vehicles owned by the company as well as any “temporary substitute” for one of those vehicles. This policy included a specific endorsement for UIM coverage in Indiana. Nevertheless, the insurer argued it had no obligation to pay the plaintiff’s claim because of another provision in the insurance policy that required any temporary rental vehicle to be licensed in Illinois, which the plaintiff’s rental was not.

The insurance company may have thought it found a loophole, but the Indiana Court of Appeals disagreed. Affirming a trial judge’s earlier ruling, the appeals court said the “plain language of the policy” supported the plaintiff’s claim for Indiana UIM benefits. Basically, there was no conflict in the policy because the Indiana UIM endorsement took priority. The plaintiff’s temporary rental vehicle qualified as an “insured” vehicle at the time of his rear-end accident, and the insurance company could not use other language in the policy to reject coverage.

Contact a Madisonville Car Accident Lawyer Today

Just because you pay your auto insurance premiums on time each month, that is no guarantee that your insurance company will not pull all out of the legal stops to deny your claim if they think they have valid grounds. That is why it is crucial to work with a qualified Madisonville car accident lawyer who will look out for your interests. Contact Whitfield Crosby & Flynn to schedule a consultation. We have offices in Madisonville, Kentucky; Chattanooga, Tennessee; and Indianapolis, Indiana.

Source:

scholar.google.com/scholar_case?case=2780798717624479279