The Carefully Worded Insurance Policy: Making Sure Your Coverage Matches Your Expectations

Do you drive an automobile insured through an employer? How well do you know the policy? It’s possible that you aren’t covered as well as you think.

The petitioners of Broussard v. Progressive Sec. Ins. Co. were merely seeking coverage compensation after a seemingly simple traffic accident in Maurice, Louisiana. They ended up in court and dealt with costly appeals over whether or not the driver of the other automobile, a dump truck, was insured by the business who hired him for this particular haul. The driver, who owned the dump truck, was a contractor, and thus not an employee. As a result, he was screened out of much of the hiring company’s insurance policies, thus potentially inhibiting the petitioners’ attempt to recover.

The major questions regarding the insurance coverage were over the definition of a “hired” auto and the definition of a “nonowned auto,” in light of the specific policy at hand. While it may seem at first glance that the dump truck had to qualify under one of these categories, the court found there was a genuine issue of material fact as to whether the company had “hired” the truck or “hired” the services of the driver. This distinction is important because specifically hiring the truck would result in coverage under this insurance policy, whereas hiring the full services of a driver would not result in coverage for the truck. The court considered invoice tickets engaging the driver’s company generally, and not a specific vehicle, to be a relevant factor in deciding this issue.

This distinguishing issue regarding what exactly the company had “hired” was also relevant to the consideration of whether the truck was covered as a “nonowned auto” when it was being driven by someone who was not an employee. Although the insurance policy in question offered several examples and designations of a “nonowned auto,” the petitioners were still able to proffer several cases where a “nonowned auto” had been defined by the court. The court ultimately found this case as factually distinguishable from all of the proposed case law comparisons. Although this truck was not owned by the hiring company, it still might not qualify as a “nonowned auto” for insurance purposes. The insurance policy potentially covered the operation of a “nonowned auto” with the following language: “anyone else while using with your permission a covered ‘auto’ you own, hire or borrow [is covered under this section].” As discussed above, the court found a genuine issue of material fact regarding whether or not the vehicle had actually been “hired.”

If you have a similar insurance policy, or are potentially covered through your employer, there are a few other important issues to note regarding “nonowned auto[s].” If a “nonowned auto” is covered, it is likely that the coverage is contingent upon the vehicle being used specifically for the business or personal purposes of the insured.

Insurance agreements are like all other contracts—they’re complicated! You may need a lawyer to help you determine what rights you have regarding a policy. Whether you’ve been in an auto accident in a company vehicle or suffered a collision in your personal automobile, call the Berniard Law Firm today to speak with an attorney.

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