Is a Turo Rental Vehicle a “Temporary Substitute Car” Under an Insurance Policy?
State Farm and GEICO filed appeals from an order denying their motions for summary judgment in an automobile accident action. The Court of Appeals held that under the plain language of the insurance policies, the plaintiff wasn’t entitled to uninsured motorist coverage.
Background: the plaintiff was making a delivery for her employer in a rented car through Turo
The plaintiff was injured in a motor vehicle collision with a hit-and-run driver. At the time, the plaintiff was making a delivery for her employer (her husband’s company). She was driving a vehicle that she had rented through a car-sharing company. Turo is “an online platform through which people can rent out their personal vehicles.”
The plaintiff filed a complaint for damages against the unknown other driver. She served State Farm and GEICO with the complaint seeking uninsured motorist benefits. State Farm issued a policy to her employer, and GEICO insured the Buick that the plaintiff was driving at the time of the accident.
State Farm and GEICO answered the complaint, and each filed a motion for summary judgment. The trial court denied the motions in a single order, and the Court of Appeals granted the insurers’ applications for interlocutory appeal. These appeals followed.
Court of Appeals: temporary substitute car
State Farm argued that it was entitled to summary judgment because the Buick wasn’t a covered vehicle and because the plaintiff wasn’t an insured under the terms of the policy it had issued to her employer.
Presiding Judge Christopher J. McFadden explained that an insurance policy is simply a contract, that should be construed as any other type of contract. If the language in an insurance policy is unambiguous and there’s only one reasonable construction possible, the court will enforce the contract as written.
State Farm
The State Farm policy listed the plaintiff’s employer as the named insured and listed a Dodge Grand Caravan and a Jeep Gladiator as the covered vehicles. At the time of the collision, the plaintiff was driving the Buick because her husband was using the Jeep Gladiator, and the Dodge Grand Caravan had been sold.
The plaintiff argued that she was an insured under the State Farm policy because the Buick was a “temporary substitute car” as defined in the policy. She argued that the Buick was a “temporary substitute car” because she was driving it due to mechanical issues with the Dodge Caravan. However, Judge McFadden found that, under the language of the policy, the Buick wasn’t a temporary substitute car because the Caravan had been sold, regardless of the reason for the sale.
The State Farm policy defined “insured” in the uninsured-motor-vehicle-coverage section to mean:
- Any person while occupying:
- Your car for which a premium for that your car is shown under “Coverage Symbol U” or “Coverage Symbol UE” in the “POLICY PREMIUM” schedules on the Declarations;
- A newly acquired car; or
- A temporary substitute car that is temporarily replacing a car described in (1) or (2) above.
- Any person or organization entitled to recover compensatory damages as a result of bodily injury to an insured as defined in a. above.
In the general definitions section, the policy defined “temporary substitute car” as “a car that is the lawful possession of the person operating it and that:
- Replaces a “your car” or a newly acquired car for a short time while that car is out of use due to its:
- Breakdown;
- Repair;
- Servicing;
- Damage; or
- Theft; and
- Neither you nor the person operating it own or have registered.
The policy defined “your car” as “the car or cars shown in the ‘VEHICLE SCHEDULE’ on the Declarations,” and explicitly provided that, “Your Car does not include a car that you no longer own or lease.”
It was undisputed that the plaintiff’s employer no longer owned the Dodge at the time of the collision because it had been sold before then. As such, the Dodge was no longer a “your car” under the plain language of the insurance contract (“Your Car does not include a car that you no longer own. …”). And since the Dodge was no longer a “your car,” the Buick was not a temporary substitute car for a “your car.” As such, the plaintiff wasn’t entitled to uninsured motorist benefits under the State Farm policy.
The plaintiff argued that, in effect, she was the named insured under the policy because (i) the plaintiff’s employer, the named insured as shown on the policy, was just a trade name; (ii) her husband is its sole owner; and (iii) she is a manager. The plaintiff’s employer was a domestic limited liability company registered under Georgia law—not just a trade name for an individual. Judge McFadden explained that a limited liability company is a separate legal entity from its owners. And a limited liability company, unlike a sole proprietorship, is capable of being the true named insured on a contract. As a result, the plaintiff wasn’t effectively a named insured on the policy.
Moreover, the plaintiff argued that State Farm was estopped from denying coverage because the plaintiff’s employer was still paying insurance premiums for the Dodge, and State Farm accepted the payments. But she fails to point to any evidence that the plaintiff’s employer informed State Farm or that State Farm otherwise knew of the plaintiff’s employer’s sale of the Dodge when it accepted any premium payments. Absent evidence of such knowledge, the plaintiff didn’t show an estoppel. Accordingly, the trial court erred in denying State Farm’s motion for summary judgment.
GEICO
GEICO argued that the trial court erred in denying its motion for summary judgment because, contrary to the trial court’s ruling, the undisputed evidence showed that the plaintiff rented the Buick through Turo, and therefore the Buick was excluded from coverage. The Court of Appeals agreed.
Judge McFadden opined that if the policy exclusions are unambiguous, they must be given effect even if beneficial to the insurer and detrimental to the purported insured. The Court won’t strain to extend coverage where none was contracted or intended. Here, the GEICO policy expressly excluded uninsured motorist coverage for “any motor vehicle operated, maintained or used as part of personal vehicle sharing facilitated by a personal vehicle sharing program.” It defined “personal vehicle sharing program” as “a business, organization, network or group facilitating the sharing of private passenger vehicles for use by individuals or businesses.”
The plaintiff testified at her deposition that she rented the Buick through the car-sharing company Turo. So, under the plain language of the exclusion, she wasn’t entitled to uninsured motorist benefits under the GEICO policy.
Without citing any support, the plaintiff argued that the owner of the Buick allowed her to borrow it, so her use of the car wasn’t “facilitated” by “a personal vehicle sharing program.” She based her argument on the fact that when she went to pick up the car she’d reserved with Turo, the owner gave her a different car to use, the Buick. But she unequivocally testified that she rented the Buick through Turo when the other car wasn’t available. However, she pointed to no evidence that the owner of the Buick allowed her to use it without payment. In any event, even though the plaintiff reserved a different car through Turo, her rental of the Buick was still “facilitated” by Turo. As a consequence, this fell within the exclusion.
The plaintiff argued that the exclusion is contrary to Georgia law. Judge McFadden disagreed. O.C.G.A. § 40-1-223(a)(3)specifically provides that a motor vehicle liability insurer “may exclude any and all coverage[, including uninsured motorist coverage,] for any claim afforded under a shared vehicle owner’s motor vehicle liability insurance policy. …” O.C.G.A. §§ 40-1-220(11) defines “shared vehicle owner” as “the registered owner of a vehicle made available for sharing through a peer-to-peer car-sharing program,” and § 40-1-223(b) says that “nothing in this part shall be construed to invalidate or limit an exclusion contained in a motor vehicle liability insurance policy … that excludes coverage for motor vehicles made available for rent, sharing, or hire. …”
Thus, the exclusion was permissible under Georgia law.
The Court of Appeals reasoned that because the plaintiff rented the Buick through Turo, it was excluded from coverage under GEICO’s policy, and the trial court erred in denying GEICO’s motion for summary judgment. The judgments were reversed. State Farm Mut. Auto. Ins. Co. v. Bar nor-Cooper, 2026 Ga. App. LEXIS 245, 2026 LX 237447, 2026 WL 1411768 (Ga. App. May 20, 2026).
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