In a South Carolina district court, the 2017 case of Nationwide Mutual Insurance v. Van Sickle & Rush challenged whether insurers could be responsible for paying liability claims stemming from accidents where the insured had loaned their vehicle to someone and caused an accident. Appolina Rush was driving a car borrowed from a Nationwide Insurance customer when she injured a couple (the Van Sickles) in a collision. The Van Sickles brought a suit against Rush and Lois Prince, the vehicle owner, who is the primary driver listed on the insurance policy. Nationwide sought a declaratory judgment stating they were not liable for covering Rush in the incident.
Summary of the Facts
- Lois Prince was the owner of the car and authorized her son Broderick Goodwin to use it
- Goodman lived separately from his mother, and she had another vehicle for her use
- The Nationwide insurance policy purchased by Prince stated that a relative or other person who was granted permission to drive the car would be covered
- The term relative in the policy was defined as one who lives in the household related by blood, marriage or adoption
- Nationwide claimed that Rush was not given permission from Prince to operate the car and that Goodwin's granting of permission to Rush did not afford liability coverage
- Goodwin was not the owner or primary insured on the policy, but was listed as an “insured driver”.
Court Interpretation and Ruling
The court found that Goodwin was listed on the insurance policy as an insured driver, which is considered a secondary status based on the policy compared to the primary “named insured”, which Prince was. Goodwin did give permission to Rush to operate the vehicle; however, based on Goodwin's status in the policy, he cannot extend liability coverage to Rush. Prince, is the lone named insured individual on that policy, meaning only she can extend liability by granting permission. In addition, during a deposition associated with the matter, Prince and Goodwin confirmed that their agreement was that only Goodwin was supposed to operate the vehicle. No evidence existed that Prince had expressed anything to the contrary beyond that. The summary judgment on behalf of Nationwide was granted by the court.
How Other Insurer Policies Handle Similar Incidents
Another large auto insurer, State Farm, recently had input on the topic. Jeanne Salvatore, a Public Affairs VP, explained that usually, liability coverage will extend if the person is driving with your consent. In cases where another driver will be routinely using the vehicle, it is best to consider adding them to the policy. Ultimately, the specific terms of the policy will dictate this issue and must be reviewed individually.
The Law Firm of Jeremy Rosenthal works on behalf of Colorado injury victims in incidents resulting from the negligence of others. Colorado law has time limitations on how long you have to pursue a case; therefore, contact the office as soon as possible for a free consultation at (303) 825-2223.