Rental car insurance policy excludes UIM coverage

The Indiana Court of Appeals reversed the denial of an insurance company’s motion for summary judgment in a lawsuit brought by a customer injured in a car accident who had purchased optional supplemental liability protection when renting a car. The trial court incorrectly denied the company’s motion for summary judgment on the premise it did not provide uninsured or underinsured motorist coverage to the customer.

Charlene Frierson was driving a car she had rented from Enterprise when she was involved in an accident with Ashley Talsma. Talsma’s policy carrier tendered $25,000 in policy lability limits to Frierson as well as her own policy tendering $25,000 of UIM coverage. Frierson then sought coverage under the supplemental liability protection she had purchased through Enterprise from Empire Fire and Marine Insurance. Empire sought summary judgment declaring it did not provider UM or UIM coverage to Frierson.

The trial court denied the motion and a trial was held, in which Frierson won a verdict of $185,000, which was later reduced to $79,500 based on comparative fault and set-offs of the previous $50,000 paid out.

In Empire Fire and Marine Insurance Company v. Charlene Frierson and Roderick Frierson, 92A02-1503-CT-126, Empire argued its policy clearly and unambiguously excluded UM and UIM coverage except in five states, none of which are Indiana, and that Enterprise accordingly paid no premium for UIM coverage for vehicles rented and operated in Indiana. Frierson claimed the rental agreement was comprised of fine print that was difficult to read.

The Court of Appeals agreed with Empire and reversed summary judgment. The appellate court noted that the rental agreement only had two and one-half pages of fine print, and it noted several times the SLP exclusions. The Empire policy contained easily readable typeface, was six pages long, and states on the second page of the policy, under “EXCLUSIONS” that “Liability arising out of benefits payable under any uninsured or underinsured motorist law, in any state” is excluded from coverage.

The rule espoused in Nat’l Mut. Ins. Co. v. Curtis, 867 N.E.2d 631, 637 (Ind. Ct. App. 2007), does not apply, the COA held. In that case, the placement of a trampoline exclusion in a policy was inconspicuous and listed on the 15th page of the policy in fine print, and nowhere was there any straightforward and unconditional statement that the policy was not intended to protect homeowners in the event someone is injured using a trampoline.