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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

In <a href="http://publicdocs.courts.mi.gov:81/OPINIONS/FINAL/COA/20150305_C319665_45_319665.OPN.PDF" target="_blank" rel="noreferrer noopener"><em>Fuller v. GEICO Indemnity Co.</em></a>, 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.

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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.

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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.&nbsp; Therefore, the Court of Appeals affirmed the trial court’s dismissal of the Fullers’ claims against GEICO.

Labor and Employment

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

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