Auto Insurer Not Liable for Knoxville Rental Car Accident: Progressive Hawaii Insurance Corp. v. Gulley

A recent federal lawsuit demonstrates the importance of protecting yourself by maintaining uninsured motorist accident coverage on your personal vehicle. In the case, the Eastern District of Tennessee at Knoxville ruled in favor of an automobile insurer who was sued for damages following a motor vehicle accident involving a rental car. In Progressive Hawaii Insurance Corp. v. Gulley, a Knoxville woman rented a Nissan Maxima for a family trip. Prior to renting the car, the woman purchased liability auto insurance for her personal vehicle from Progressive Hawaii Insurance Corporation. Under the terms of the rental agreement, the woman was the only authorized driver of the Nissan.

While attending a family gathering in Knoxville, the woman’s son apparently drove the rental car without her permission. He and three others allegedly drank alcohol and drove the vehicle around town before the son’s friend got behind the wheel of the Nissan. While the friend was driving, the Nissan was involved in an injury traffic wreck with another automobile. Unfortunately, one of the occupants of the rental car was also killed in the crash.

After a personal injury lawsuit was filed against the woman and her insurer in the Eastern District of Tennessee, the insurance company filed a motion for summary judgment. When a party to a lawsuit files such a motion, that party is asking the court to rule that no material facts are in dispute and enter judgment in the party’s favor based upon the undisputed evidence offered in the case. According to the insurance company, it had no duty to defend or indemnify the woman because the rental car was not a covered vehicle under the terms of the liability policy. Additionally, the insurer claimed that the individual operating the car at the time of the crash was not a covered driver.

After reviewing the terms of the insurance policy, the federal court held the Nissan did not qualify as a covered vehicle. Additionally, the court stated that even if the rental car was a covered automobile, neither the woman’s son nor his friend were permissive drivers because neither was named on the policy or lived with the woman at the time of the fatal crash. Since the rental car was not an insured vehicle under the terms of the woman’s liability insurance policy, and the driver was not an insured motorist according to the plain language of the policy, the Eastern District of Tennessee granted the insurance company’s motion for summary judgment and dismissed the case.

The victim of an unexpected car accident can suffer tremendous financial difficulties due to lost wages, any required medical care, property damage, and other losses. Unfortunately, in some cases the at-fault motorist may lack sufficient liability insurance to cover a victim’s injuries, or, even worse, the driver may not carry any accident insurance. Because of this, you are advised to maintain solid uninsured or underinsured motorist coverage.

If you were hurt or a loved one was killed in a motor vehicle accident in Eastern Tennessee, please contact the Hartsoe Law Firm, P.C. through our website or call us at (865) 804-1011.

Additional Resources: Progressive Hawaii Insurance Corp. v. Gulley, Dist. Court, ED Tennessee 2014

Related Blog Posts: Knoxville Case Outlines Property Owner’s Duty in Premises Liability Case: Goumas v. Mayse, June 18, 2014, Knoxville Injury Lawyer Blog

Another Jury Verdict Upheld by Knoxville Court in Car Accident Lawsuit – Salyer v. Linnen, June 11, 2014, Knoxville Injury Lawyer Blog