Fox & Farley, Attorneys at Law

Uninsured Motorist Coverage May Not Cover All Situations

Tennessee law requires all automobile insurance policies to offer uninsured motorist coverage. As the name suggests, this coverage pays benefits if you are in an accident with another vehicle that lacks insurance. Ideally, this would mean someone injured by another driver’s negligence would never go uncompensated, but unfortunately, there are gaps in the legal scheme that can leave victims hanging.

Insurer Refuses to Cover Man Intentionally Injured by Rental Car Driver

Earlier this year, the Tennessee Court of Appeals dealt with just such a situation. The plaintiff in this case owned a bar in Franklin. He refused to serve a customer, who responded by intentionally hitting the plaintiff with his car. The impact injured the plaintiff’s knee, requiring him to undergo surgery and extended physical therapy.

The customer had insurance, but his carrier disclaimed coverage because striking the plaintiff was “an intentional act and not covered by the policy.” Furthermore, the customer was actually driving a rental car. Federal law exempts rental companies from any liability under state law for acts committed by individuals who rent vehicles. The rental company is also considered a “self-insurer” under Tennessee law. A self-insurer is someone who sets aside sufficient funds or resources to guarantee compensation in the event of injury.

The plaintiff therefore sought coverage under his own uninsured motorist policy. His insurer refused, arguing despite the lack of other available coverage, the vehicle that hit him was not “uninsured” as defined by Tennessee law. The trial court agreed and granted the insurer’s motion for summary judgment. The plaintiff appealed.

But the Tennessee Court of Appeals upheld the trial court’s decision. The court explained the plaintiff’s uninsured motorist policy specifically excluded injuries caused by “self-insured vehicles,” such as those maintained by the rental company. The plaintiff argued this exclusion should not apply because the vehicle was not being driven by an employee or agent of the rental company. The Court of Appeals said nothing in Tennessee law imposed such a requirement. If the vehicle is owned by a self-insurer, it is not an “uninsured motor vehicle” for purposes of the plaintiff’s policy.

Nor did it matter the plaintiff could not sue the rental company for negligence due to the federal exemption. The Court of Appeals said the rental company’s liability, or lack thereof, was irrelevant to a determination of an uninsured motorist’s obligations under state law. This case only addressed the “contractual relationship” between the plaintiff and his insurer.

Need Help from One of Our Attorneys?

As the above case illustrates, you cannot always rely on your automobile insurance company to pay uninsured motorist benefits, even in cases where you have no other option to seek damages from the responsible parties. This is why it is always important to have someone on your side when dealing with insurers. An experienced Tennessee personal injury attorney can advise you on uninsured motorist coverage and other legal problems arising from an automobile accident. Contact Fox & Farley, Attorneys at Law, in Knoxville or Clinton today if you would like to speak with an attorney right away.

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