The Connecticut Supreme Court ruled that when a driver’s auto policy extends bodily injury coverage to a rental car, uninsured motorist coverage must also apply to injured passengers in that vehicle, even when those passengers are not named insureds on the policy.
The court said Connecticut law and insurance regulations support that outcome. It pointed to the state’s long-standing public policy favoring uninsured motorist protection and held that the injured passengers were entitled to coverage under both statute and regulation.
Progressive Direct Insurance had denied the claim, arguing the passengers were not named insureds under the driver’s policy.
The insurer also argued that its policy complied with Connecticut’s statutory and regulatory framework for uninsured motorist coverage.
The ruling partly reverses a lower court decision that sided with Progressive, though the Supreme Court upheld the lower court’s decision allowing Ohio Security Insurance Co. to deny uninsured motorist coverage under a separate commercial auto policy.
In its review of the Progressive dispute, the court said Connecticut law clearly requires every auto policy to provide a minimum level of uninsured and underinsured motorist coverage to its insured.
It also noted that state regulations identify vehicle occupants as a class that can receive broader uninsured motorist protection. Under those rules, coverage must protect occupants of every motor vehicle to which bodily injury liability coverage applies.
That point decided the case. Progressive insured the driver of the rental car, and the driver’s policy extended bodily injury coverage to rented vehicles.
At the time of the crash, the plaintiffs were passengers in that rental car. Because bodily injury coverage applied, the court found that uninsured motorist coverage had to extend to those occupants as well, even though they were not listed as named insureds.
The court reached a different result with Ohio Security. It held that the insurer did not owe uninsured motorist benefits under a commercial auto policy the plaintiffs argued was ambiguous.
The justices found no ambiguity in the policy language and said it did not extend coverage to the injured occupants.
The court also rejected the argument that policy references to individuals or family members created uncertainty.
Corporations do not have family members, the court said, so that language did not make the contract unclear.
It found that the named insured under the Ohio Security policy was the plaintiff’s company, not the individual passenger, and that the rental car was not a covered auto under the policy. It also was not rented as a substitute for any vehicle listed in the policy.
