Uninsured motorist (UM) coverage provides you with important financial protections in the event of an accident with a driver who lacks sufficient insurance to fully compensate you for your injuries. What about a situation in which you are driving someone else’s car? Can you claim UM benefits under their policy?
Jones v. Federated Mutual Insurance Company
The Georgia Court of Appeals recently addressed this issue in the context of a somewhat unusual case. The plaintiffs were test-driving a car owned by a dealership. At the time, neither plaintiff had his or her own auto insurance.
During the test drive, the plaintiffs were rear-ended by another driver. The plaintiffs later settled their personal injury claim against the negligent driver for the liability limits of his insurance policy. As this was insufficient to cover the full amount of the plaintiffs’ injuries, the couple then attempted to file a claim for UM benefits with the auto dealership’s insurance company, which insured the test vehicle.
The insurer denied the claim. It pointed to the dealership’s policy, which expressly rejected UM coverage for insured persons other than an “director, officer, owner, or partner,” of the dealership, or a family member of such an individual. Since the plaintiffs did not fall into any of these categories, the UM coverage did not apply to them.
A trial court agreed and granted summary judgment to the insurance company in a lawsuit brought by the plaintiffs. In a June 13, 2018, opinion, the Court of Appeals affirmed. The appeals court noted the “plain terms of the Uninsured Motorist Provision” at issue clearly expressed the parties intent to “exclude uninsured motorist coverage for persons such as” the plaintiffs. Indeed, the plaintiffs themselves acknowledged that the dealership chose to provide greater coverage for its own people than other individuals who may end up using its cars.
The Court of Appeals further rejected the plaintiffs’ arguments that the UM provision violated Georgia law or public policy. With respect to the law, the Court noted Georgia allows named policyholders–in this case the dealership–to “reject in writing uninsured motorist coverage.” But this is not an “all or nothing” restriction. It is permissible to “partially” reject UM coverage depending on the insured party’s needs. Put another way, an insured party may opt to “tier” UM coverage in such a manner the dealership did in this case.
Nor does such a tiered approach violate public policy. For one thing, the Court of Appeals noted the plaintiffs “have not specified what public policy they claim is violated.” Again, the law expressly permits parties to reject or tier UM coverage. The plaintiffs’ real problem, the Court observed, was with the dealership’s decision to reject UM coverage for passengers and third-party drivers while preserving it for their own officer, directors, partners, and family members. But this does not run afoul of public policy. Accordingly, the Court of Appeals said the plaintiffs were not entitled to any UM benefits under the dealership’s insurance policy.