Connecticut High Court: Injured Rental Car Occupants Covered for Uninsured Motorist

In a case involving a rental car hit by an uninsured motorist, the Connecticut Supreme Court has ruled that the auto insurance policy of the driver that extended bodily injury coverage to the rental car must also provide uninsured motorist coverage to the injured passengers even though they are not named insureds on the policy.

The state’s high court found that public policy on uninsured motorist coverage set forth in state law and regulations supports requiring that the driver’s Progressive Direct Insurance Co. policy cover the occupants in the rental car.

“Our state has consistently maintained a strong public policy favoring uninsured motorist coverage,” the high court noted, ruling the plaintiff occupants in the rental car were entitled to coverage by statute (§ 38a-336 (a) (1) (A)) and in accordance with the corresponding state regulation (§ 38a-334-6 (a)).

Progressive had denied coverage on the grounds that the occupants were not named insureds on its policy. The insurer further maintained that its policy comports with the state’s statutory and regulatory scheme governing uninsured motorist coverage.

With the ruling, the high court partially overturned a lower court order that agreed with Progressive while upholding the lower court in allowing Ohio Security Insurance Co. to deny uninsured coverage under a commercial auto policy.

In discussing the Progressive situation, the high court noted that state law “expressly provides that every automobile insurance policy must provide its insured with a minimum amount of uninsured and underinsured motorist coverage.” Also, although occupants of a vehicle may have their own liability coverage, which would entitle them to uninsured motorist benefits, state insurance regulations designate “occupants” as a class of persons “who may receive more extensive uninsured motorist coverage.” The regulation says that the coverage “shall insure the occupants of every motor vehicle to which the bodily injury liability coverage applies.”

Progressive insured the driver of the rental car. The driver’s policy provided bodily injury coverage to motor vehicles rented by the driver. At the time of the accident, the plaintiffs were occupants in the rental car covered by the bodily injury coverage of the Progressive policy. Thus by state law and regulations, Progressive was required to extend uninsured motorist coverage to the occupants even though they were not named insureds on the driver’s policy.

At the same time, the high court held that Ohio Security was not required to provide the occupants with uninsured coverage under a commercial auto policy that the plaintiffs maintained was ambiguous. The high court found the Ohio Security policy was not ambiguous and did not extend to cover the occupants. The court said that language in the policy referring to individuals or family members should not be construed as ambiguous because corporations do not have family members. The court found that the Ohio Security policy “unambiguously provided that the named insured was the plaintiff’s company, not the plaintiff,” who was one of the injured occupants, and the rented motor vehicle was not a covered auto under the Ohio Security policy, nor was it rented to replace any motor vehicles listed in the policy.