In a Wal-Mart parking lot in Minden, Louisiana, two mothers and two children were hit by an oncoming car rented two days previously from a local Enterprise. The families sued based upon their injuries and several insurance companies got involved. One insurance company, Safeway, was for Peaker, the individual driving the car. Safeway’s policy included a clause that stated they would cover accidents in vehicles that he did not own, “provided the non-owned vehicle is being used by the named insured with the permission of its owner.”
Normally, permission to drive someone else’s vehicle is fairly straightforward. In this case, the dispute involving coverage depended on whether the rental car company gave Peaker permission to drive the rental car. Peaker’s girlfriend actually rented the car and Peaker’s name was not on the list of authorized drivers. If Enterprise did not give its permission for Peaker to drive the car, then, Safeway alleged, the insurance company would not cover damages related to the accident.
There was conflicting testimony as to whether Peaker actually had permission. According to Peaker, he went to Enterprise with his girlfriend to pick up the car. He paid cash for it and rode with her back to their house in the vehicle. However, the Enterprise employee who rented the car to them did not remember seeing Peaker and they had no records as to where the cash payment originated. At the time of rental, the employee specifically asked Peaker’s girlfriend if anyone else would be driving the car and she answered in the negative. In addition, Peaker could not be listed regardless because he did not have a valid driver’s license at the time of rental, nor when the accident took place.
The Court not only seriously questioned Peaker’s version of the story, it also compared this case to a similar case regarding rental vehicles. If the rental company gave express or implied permission for the individual to drive the car, then the insurance should cover for any accidents. Express permission occurs when the rental company includes the driver’s name on the agreement or there is some oral agreement that has the same effect. Implied permission is slightly more complicated. Implied permission occurs when the driver’s name is not on the agreement, but the company, based on the actions of its employees, acts as if the individual had permission to drive the car.
The Court cites Sauer v. National Car Rental System, Inc., in their judgment. That case involved two women who were traveling together, Ms. Hutchins and Ms. Heflin. Ms. Hutchins’ name was on the rental agreement and Ms. Heflin was not listed as an additional driver. However, Ms. Heflin was given the instructions for operation of the vehicle, and Ms. Heflin drove the car off the lot. Later, while Ms. Heflin was driving, they got into an accident. The insurance company attempted to avoid coverage by arguing that Ms. Heflin was not on the rental agreement and therefore, the rental company did not give permission. The Court disagreed. Because the rental company watched Ms. Heflin get in the driver’s seat and gave her instructions, the rental company implicitly agreed to allow Ms. Heflin to drive the car even though her name was not on the rental agreement.
The Court compared Peaker’s situation to Sauer: the main issue noted was the rental company did not allow Peaker to drive the vehicle off the lot or give him any instructions. In fact, they specifically would not have allowed Peaker to be on the agreement because he did not have a valid driver’s license. Although Peaker said he was at the office when the transaction took place and asked questions as to the operation of the vehicle, the Court questioned whether Peaker was present at all.
As a result, the insurance coverage did not apply because Peaker did not have the rental company’s permission to operate the vehicle. Unfortunately, that means that the individuals who were injured did not get payment from the insurance company. Thankfully, there were at least two other insurance companies that did help with expenses resulting from the accident.
Dealing with insurance companies can be a very technical process; coverage occasionally involves such small distinctions as his case. As such, if you have been in an accident and would like to involve your insurance company, you should contact a lawyer.