We often get calls about insurance policies and whether coverage applies to the driver, passenger, or friend who borrowed car. The Georgia Court of Appeals recently held that the state’s ride share exception didn’t apply in a case where a man leased a vehicle to use as a taxi. In addition, the Court said the taxi driver wasn’t covered on the auto owner’s insurance because he wasn’t a listed driver.
Background
The accident occurred in September of 2017. The plaintiff, who didn’t have an uninsured motorist policy and was driving a rental car, was injured in a wreck with a taxi. The taxi driver had ended his overnight shift and was driving to pick up breakfast before heading home. According to the taxi driver, he was turning left across a multi-lane road to a restaurant and was hit by the plaintiff. The plaintiff sued for serious injuries he suffered in the wreck.
At the time of the wreck, the taxi driver was driving a 2011 Honda Civic, which he’d leased for use as a taxi. The lease was an oral agreement between the taxi driver and the car owner that started about a month before the accident. The owner imposed no restrictions on the use of the Civic by the taxi driver, who was allowed to use it 24 hours a day and to drive it for personal tasks as well as transporting fares. However, the taxi driver stated that he used it only for taxi services.
The owner of the Honda Civic provided insurance from Ethio-American on the Civic and other vehicles he leased to other drivers. The policy listed specific vehicles as well as specific drivers to whom the policy applied. The owner had drivers come and go frequently, and when they leased a vehicle, he sent a copy of their driver’s licenses to Ethio-American. Usually, the owner would visit Ethio-American’s office and add drivers to the policy when they began leasing a vehicle. However, the owner had an international trip coming up in 10 days after the taxi driver leased the Civic, and he didn’t get his driver’s license to the insurance office prior to going away.
The taxi driver testified that he had a Georgia driver’s license and a personal vehicle with insurance from Progressive. Despite not adding the taxi driver to the policy, the owner gave the taxi driver a copy of an insurance card from Ethio-American for the Civic, and it was the taxi driver’s understanding from the owner that he was covered by that insurance while he was driving the vehicle.
Progressive denied coverage to the taxi driver, stating that it would not cover the claim against him because the vehicle was being used as a taxi at the time of the incident. Ethio-American’s policy included coverage for 10 vehicles, including the Civic. However, the taxi driver wasn’t listed as a driver on the insurance policy, and as a result, Ethio-American also denied coverage because the taxi driver was not covered under its policy.
The plaintiff sued both the owner and the taxi driver, and after they defaulted, he received a judgment of approximately $220,000 against them. After the owner and the taxi driver assigned their rights to him, he sued the insurance companies. The trial court determined that the accident was excluded from coverage under both policies and granted summary judgment to Progressive and Ethio-American. The plaintiff appealed.
Plaintiff Argued the Ethio-American Policy Covered the Accident
Presiding Judge Sara L. Doyle of the Georgia Court of Appeals wrote in her opinion:
[I]n Georgia, insurance is a matter of contract, and the parties to an insurance policy are bound by its plain and unambiguous terms. Thus, when faced with a conflict over coverage, a trial court must first determine, as a matter of law, whether the relevant policy language is ambiguous.
With the growing number of non-taxi based ride-share companies in the State, the Georgia Legislature updated legislation related to taxis and other ride-share services, including O.C.G.A § 40-1-193.1. That law requires taxi services operating in Georgia to, among other things, “[o]btain and maintain personal injury and property damage liability insurance, which shall provide for the protection of passengers and property carried and of the public against injury in the coverage amounts as required by law.”
In this case, the owner obtained and maintained liability insurance for his drivers and vehicles, but he failed to include the taxi driver as a listed driver as required by the plain language of the policy. Judge Doyle said the requirement to have drivers approved by Ethio-American is clear and unambiguous, therefore, the trial court correctly granted summary judgment regarding the plaintiff’s claims against Ethio-American.
Plaintiff Argued Summary Judgment Shouldn’t Have Been Granted to Progressive
Judge Doyle first said that the ride-sharing exclusion didn’t apply here because the taxi driver wasn’t engaged in ride-sharing activity at the time of the accident. The taxi driver testified that he’d finished work for the day and was going to get breakfast before going home. It was undisputed that the taxi driver had no fare at that time of the wreck. Thus, the wreck didn’t occur “while being used: [A] to carry persons or property for compensation, fee, salary, or wages, … or [C] for ride-sharing activity” and as such, the exclusion didn’t apply to exclude coverage in this incident.
The trial court also found that the Civic wasn’t a covered automobile because the accident fell within the “regular use” exclusion — the exclusion of coverage for “bodily injury or property damage arising out of the ownership, maintenance[,] or use of any vehicle owned by you or furnished or available for your regular use, other than a covered auto for which this coverage has been purchased.” But the plaintiff argued that because the taxi driver’s rental of the Civic from the owner began fewer than 30 days prior to the accident, the car was covered as an “additional auto” under the policy and therefore was not excluded by the “regular use” exclusion. The Court of Appeals agreed.
The purpose of the regular use provision is to allow for occasional or incidental use of other cars without paying an additional premium, while excluding the habitual use of other cars to avoid increased risk on the insurance company because the company is not receiving additional premium payments. Therefore, the taxi drivers use of the Civic normally would be excluded if he had daily use of the vehicle without also adding it to the policy. But here, the plain language of the “additional auto” clause of the policy allowed for a 30-day time period during which the policy holder could acquire another automobile that would otherwise be excluded under the regular-use provision and have it insured to the same extent of the vehicles listed on the insurance policy.
Progressive argued—and the trial court found—that the Civic didn’t qualify as an additional auto because the taxi driver didn’t “own” the Civic. The term “own” wasn’t defined in the Progressive policy. Judge Doyle said that the definition of owner is defined by Black’s Law Dictionary as “[o]ne who has the right to possess, use, and convey something. …”
Under the limited terms of the lease between the owner and the taxi driver, the driver paid the owner weekly for exclusive use and possession of the Civic. He could use it for personal and job-related driving, and there was no evidence that another taxi driver could take the vehicle from him during that time. Plus, there was nothing in the terms of the agreement that prohibited the taxi driver from subleasing the Civic to another individual during the time period that he rented it from the owner.
Judge Doyle held that while obviously limited, the taxi driver had at least some “ownership” interest in the Civic, which would have made the vehicle insurable by the taxi driver under the additional auto provision. As a result, the Civic wasn’t excluded by the regular-use exclusion because fewer than 30 days had passed since the taxi driver leased the Civic from the owner, and the trial court erred by finding otherwise. So, the Court of Appeals reversed the trial court’s order granting summary judgment as to Progressive. Darden v. Progressive Mt. Ins. Co., 2022 Ga. App. LEXIS 339 (Ga. App. June 29, 2022).
Questions about Insurance Coverage or Accidents Involving Taxis or Ride Shares?
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