Rental Car Company Insurance Is Primary Liability Coverage; UIM Coverage Not Forfeited by Disclaimer in Company Brochure; Written Waiver Is Required to Waive UIM Coverage
Stempel, Jeffrey W., Journal of Risk and Insurance
RENTAL CAR COMPANY INSURANCE IS PRIMARY LIABILITY COVERAGE; UIM COVERAGE NOT FORFEITED BY DISCLAIMER IN COMPANY BROCHURE; WRITTEN WAIVER Is REQUIRED To WAIVE UIM COVERAGE
Diaz v. National Car Rental Systems, Inc., 17 P.3d 603 (Wash. 2001).
In yet another UIM auto insurance case arising in the state of Washington, the Washington Supreme Court found that the UIM coverage component of insurance sold by a rental car company could not be waived without a written waiver signed by the renter-- insured. Although the brochure describing the insurance (distributed with the car) stated that UIM coverage was not included, the court found this insufficient to avoid the coverage, which is mandated by state law unless properly waived by the insured. See 17 P.3d at 604-05.
Even without a waiver, the car rental company's product might not be subject to the state law of mandatory UIM coverage if the policy was excess rather than primary. Thus, the court had to determine whether National's insurance purchased by renters (and underwritten by the Philadelphia Indemnity Insurance Company) was primary or excess. The insurance was purchased by renter Betty Pulliam and additional driver Marilyn Walker when Pulliam rented the vehicle. She paid an additional $8.95 per day above the car rental price for the coverage, which was described by the agent as "full coverage." A copy of the policy was not distributed to Pulliam. Two days later, an uninsured motorist sideswiped the rented car, causing a rollover that injured passenger David Diaz as well as driver Walker. Personal Injury Protection (PIP or firstparty no-fault) benefits were requested but denied by National. …