Skip to main content
A Better Partnership
March 08, 2015

COA: a car rental agency may not contract to shift burden of maintaining vehicle insurance on short-term renter

In Fuller v. GEICO Indemnity Co., No. 319665, the Court of Appeals held that a car rental agency is prohibited from shifting the burden of maintaining vehicle insurance onto a party who rents a car for less than thirty days. Therefore, the Court affirmed the trial court’s order dismissing plaintiff’s claims because GEICO was the incorrect insurance provider.

Sandra House rented a vehicle from Lakeside Car Rental. The rental agreement between House and Lakeside provided that House’s vehicle insurance policy from GEICO was first priority in case of injuries sustained from a car accident. House loaned the vehicle to her friend, Gregory Fuller, who was involved in an accident. Fuller and his wife sustained injuries and subsequently sought to recover benefits from House’s insurance policy at GEICO. The insurance company denied benefits on the basis that Lakeside owned the rental car and therefore its insurer was responsible for coverage. Fuller and his wife brought suit to seek a declaration of coverage and ruling that GEICO violated Michigan’s No-Fault Act.
The Court of Appeals held that Lakeside was responsible for maintaining insurance over the rental car because Lakeside is the vehicle’s owner and registrant. The court referred to MCL 500.3101, which requires an owner or registrant of a motor vehicle to maintain personal protection insurance. The statute further provides that a person renting a vehicle becomes the owner or registrant only if the rental term is more than thirty days. Because House’s rental agreement was for one week, the court concluded that Lakeside was prohibited from requiring House to maintain vehicle insurance, voiding that provision of the contract.  Therefore, the Court of Appeals affirmed the trial court’s dismissal of the Fullers’ claims against GEICO.

NOTICE. Although we would like to hear from you, we cannot represent you until we know that doing so will not create a conflict of interest. Also, we cannot treat unsolicited information as confidential. Accordingly, please do not send us any information about any matter that may involve you until you receive a written statement from us that we represent you.

By clicking the ‘ACCEPT’ button, you agree that we may review any information you transmit to us. You recognize that our review of your information, even if you submitted it in a good faith effort to retain us, and even if you consider it confidential, does not preclude us from representing another client directly adverse to you, even in a matter where that information could and will be used against you.

Please click the ‘ACCEPT’ button if you understand and accept the foregoing statement and wish to proceed.



+ -