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COA: Insurance policy not contrary to code

Jennifer Nelson
January 1, 2008
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A minimum-coverage insurance company's policy language that excludes coverage for leased vehicles in certain circumstances isn't contrary to Indiana Code, the Court of Appeals ruled today.

In the appeal of Safe Auto Insurance Co. v. Enterprise Leasing Company of Indianapolis, et al., No. 01A02-0712-CV-1120, the Court of Appeals reversed the trial court's grant of summary judgment in favor of Enterprise Leasing on Safe Auto Insurance's complaint for declaratory judgment. Safe Auto filed the complaint arguing its policyholder, Jeffrey Harrison, was not driving a covered vehicle when he was involved in an accident with a car he leased from Enterprise, and as a result, he has no coverage under Safe Auto's policy.

The trial court agreed with Enterprise's argument that Harrison's Safe Auto policy coverage for leased vehicles - which only granted liability coverage on a rented car when Harrison's vehicle was being serviced, repaired, stolen, or destroyed - was contrary to Indiana Code Section 27-8-9-9. That statute states in part, "When a claim arises from the operation of a motor vehicle leased under a written lease agreement, if under the agreement the lessee agrees to provide coverage for damage resulting from his operation of the vehicle, then the motor vehicle insurance coverage of the lessee is primary."

Harrison rented a truck from Enterprise to drive to Virginia because he didn't think his own car was dependable enough for the road trip. When he signed the rental agreement, he declined to purchase supplemental liability protection and never provided written proof of insurance coverage for the rented truck. While in Virginia, he was in an accident, which injured those in the other car.

Safe Auto filed a complaint for declaratory relief in Adams County, requesting a judgment that there is no coverage under the Safe Auto policy and the company doesn't have a duty to defend or indemnify Harrison for the accident.

Harrison didn't have coverage under his policy for the truck because the reason he rented wasn't one of the circumstances under which Safe Auto would provide him coverage on a leased vehicle, wrote Judge Paul Mathias.

Harrison's Safe Auto policy involving lease coverage doesn't conflict with I.C. Section 27-8-9-9 because this section only applies when the lessee agrees to provide insurance coverage. Because Harrison never agreed in writing to provide insurance himself for the truck and believed Enterprise would provide the insurance, the statute isn't applicable to this case, wrote the judge.

Even if the section applied, Safe Auto's policy isn't unenforceable because the policy language doesn't run afoul of the plain language of the statute and there is no law that requires insurance companies to provide coverage for vehicles leased by their insureds for any reason.

The Court of Appeals reversed the trial court's ruling and remanded.
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  1. I just wanted to point out that Congressman Jim Sensenbrenner, Senator Feinstein, former Senate majority leader Bill Frist, and former attorney general John Ashcroft are responsible for this rubbish. We need to keep a eye on these corrupt, arrogant, and incompetent fools.

  2. Well I guess our politicians have decided to give these idiot federal prosecutors unlimited power. Now if I guy bounces a fifty-dollar check, the U.S. attorney can intentionally wait for twenty-five years or so and have the check swabbed for DNA and file charges. These power hungry federal prosecutors now have unlimited power to mess with people. we can thank Wisconsin's Jim Sensenbrenner and Diane Feinstein, John Achcroft and Bill Frist for this one. Way to go, idiots.

  3. I wonder if the USSR had electronic voting machines that changed the ballot after it was cast? Oh well, at least we have a free media serving as vicious watchdog and exposing all of the rot in the system! (Insert rimshot)

  4. Jose, you are assuming those in power do not wish to be totalitarian. My experience has convinced me otherwise. Constitutionalists are nearly as rare as hens teeth among the powerbrokers "managing" us for The Glorious State. Oh, and your point is dead on, el correcta mundo. Keep the Founders’ (1791 & 1851) vision alive, my friend, even if most all others, and especially the ruling junta, chase only power and money (i.e. mammon)

  5. Hypocrisy in high places, absolute immunity handed out like Halloween treats (it is the stuff of which tyranny is made) and the belief that government agents are above the constitutions and cannot be held responsible for mere citizen is killing, perhaps has killed, The Republic. And yet those same power drunk statists just reel on down the hallway toward bureaucratic fascism.

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