Plain Meaning of “Test Drive”
December 22, 2014
This action was commenced for a declaratory judgment and breach of contract based on an insurance coverage dispute concerning an auto driven by the insured. This case is Exotic Motorcars and Jewelry, Inc. v. Essex Ins. Co., No. 4D13-3937, 2014 WL 6460957 (Fla. App. Nov. 19, 2014).
The coverage issue arose from an accident that occurred when Exotic's owner drove a vehicle to another dealership for an inspection and possible servicing. Exotic obtained a Porsche from a wholesale dealer and placed the car in its showroom. Two days later, a buyer signed a purchase contract. Exotic's owner testified that because Exotic did not allow test drives of their expensive vehicles and had no service department, he drove the Porsche to another dealership for an inspection. On route to the other dealership, an accident occurred.
The insured sent a claim to the insurer, Essex Insurance, for the damage. The insurer declined coverage based on its interpretation of the policy language. The insured filed a lawsuit. The trial court ruled in favor of the insurer, stating that although the vehicle was covered under the policy, the accident was not a covered collision because the collision did not occur during a test drive as the policy required. This appeal followed.
The District Court of Appeal of Florida, Fourth District, noted that the auto policy applied to losses that occur during a test drive of the covered vehicle or during transport of the covered vehicle for direct purchase or sale. The court sought to define “test drive” since the policy did not do so. The court reviewed dictionary definitions and found that a “test drive” is defined as “to drive a vehicle on the highway or a special track in order to evaluate performance and reliability; to drive a car for a limited period of time in order to assess its capabilities and limitations.” To the court, this meant the term “test drive” was unambiguous. The plain meaning of “test drive” includes any person driving the car for purposes of evaluating performance.
The insured testified that he considered his drive to be a test drive because a lot of those types of cars sit in garages and they are not very functional. Also, since Exotic did not perform repair service, any issue with the car would have to be determined through a test drive and fixed at another location. The court agreed with the insured. The ruling of the trial court was reversed.
Editor's Note: The court of appeal used dictionary definitions of the term “test drive” to find coverage for the collision loss. The policy did not define the term even though coverage depended on the vehicle being damaged during a test drive, so the court relied on the plain dictionary meaning of the term to find coverage for the loss.