Michigan Appellate Decision Illustrates Potential Insurance Pitfalls With Rental Cars
At one time or another, all of us have purchased a rental car while on vacation, on a business trip, when our car is being serviced, etc.. Some rental car companies charge an extra fee if more than one person will be driving the car, such as a spouse. It is very important that all persons who will be driving the car, be listed on the rental agreement. This is because in many situations, if the car is involved in an accident, only those persons listed on the contract will be insured.
A recent Michigan Court of Appeals decision, Robinson v. Titan Ins. Co, unpublished opinion per curiam of the Court of Appeals, decided February 7, 2008 [Docket No. 275360] should act as a warning to all consumers that every person who drives a rental car should be listed on the rental contract. In that case, the Plaintiff went to rent a car. After filling out the paperwork, the rental agent informed him he had to place a deposit on the vehicle with a credit card. The Plaintiff advised that he did not have a credit card, but his friend, who had driven him to the rental facility, did. The Plaintiff’s friend came into the rental facility and, using her credit card, filled out the rental paperwork for the vehicle in her name. The Plaintiff was not named on the rental contract. However, the rental company knew that the Plaintiff was going to be the primary driver and handed him the keys. The Plaintiff thereafter left the rental facility, driving the rental vehicle. A few days later, the Plaintiff was involved in an accident with an uninsured motorist and was seriously injured. Following the accident, the Plaintiff made a claim for uninsured motorist benefits with his insurance company, Titan Insurance Co. Titan denied the claim, arguing that because the Plaintiff was not listed on the rental agreement, he was driving the rental car without the permission of the Rental Company. Thus, Titan argued that he was not covered under the insurance policy.
Fortunately for the Plaintiff, the trial judge, and the three judges on the Court of Appeals’ panel, looked beyond the rental contract and held that the Plaintiff’s case against Titan should not be dismissed. The Court held that a jury should decide whether the rental company gave the Plaintiff verbal permission to drive the car.
Although the Plaintiff in Robinson, supra will have his day in Court, the result could have been very different depending on the facts. Moreover, there is no guarantee that the jury will agree with Mr. Robinson’s argument and find in his favor. Also, this issue (and the trouble and expense of litigating it) could have been avoided if the Plaintiff had only been listed as a second driver on the rental contract.
Too often, people are seriously injured in auto accidents in Michigan and are denied certain rights and insurance benefits because of innocent mistakes like the one in Robinson, supra. Even if there is an extra charge to list a second driver on a rental car contract, it is better to pay the fee than to run the risk of being deemed uninsured and liable for much greater costs in the event an of an accident. This is because, when it comes to reviewing claims, there is no such thing as a harmless “technicality” from an insurance company’s perspective .
