An appellate court in Florida has reversed a trial court's decision and ruled that a woman injured in an accident involving an uninsured/underinsured (“UM”) motor vehicle while she was a passenger in a rental vehicle driven by her sister could not recover UM benefits under her sister's auto insurance policy because the rental vehicle was not a “covered auto” under her sister's policy.
The Case
Nancy N. Pawelczyk's sister, Donna Anderson, was driving a rental vehicle while her Jeep, which was listed on the declarations page of the auto insurance policy she had purchased from Progressive American Insurance Company, was getting a new transmission. Ms. Pawelczyk was a passenger in the rental vehicle. Both sisters were injured in an accident involved an uninsured/underinsured motor vehicle.
After Progressive settled Ms. Anderson's claim, Ms. Pawelczyk asked a court to declare that coverage under her sister's Progressive policy extended to her. She argued that the rental vehicle was a “covered auto” under the Progressive policy and, therefore, that she was an “insured person” entitled to coverage.
The trial court entered judgment in favor of Ms. Pawelczyk, and Progressive appealed.
The Appellate Court's Decision
The appellate court reversed.
In its decision, the appellate court explained that, to be a “covered auto” under the Progressive policy, the rental vehicle either had to be an additional auto or a replacement auto.
The appellate court ruled that the rental vehicle was not a replacement auto, which the policy defined as “an auto that permanently replaces an auto shown on the declarations page.”
Then, the appellate court determined that the rental vehicle also was not an “additional auto.” It rejected Ms. Pawelczyk's contention that her sister was the beneficial owner of the rental vehicle because she had dominion and control over the vehicle, finding that this argument, if accepted, “would permit UM coverage for bodily injuries suffered by every passenger in any vehicle driven by a named insured.” Moreover, the appellate court added, Ms. Pawelczyk's argument “erroneously equates vehicle rental, which is a purely possessory interest, with vehicle ownership – which confers a broader property interest, including the right to encumber or sell the vehicle.”
The appellate court concluded that because Ms. Pawelczyk's sister did not have any ownership interest in the rental vehicle, she was not a beneficial owner. As a result, the vehicle was not a “covered vehicle,” and Ms. Pawelczyk was not an “insured person” entitled to coverage under her sister's policy.
The case is Progressive American Ins. Co. v. Pawelczyk, No. 2D18-1651 (Fla. Ct. App. May 15, 2019). Attorneys involved include: Stuart J. Freeman of Freeman, Goldis & Cash, P.A., Saint Petersburg, for Appellant; Robert W. Hitchens of Hitchens & Hitchens, P.A., Saint Petersburg, for Appellee.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].