A Florida appellate court recently held that a rental car passenger injured in an accident could not recover compensation for her injuries under the rental car driver’s uninsured motorist coverage because the rental car was not a “covered auto.” Progressive Am. Ins. Co. v. Pawelczyk, 2019 Fla. App. LEXIS 7373 (Fla. 2d DCA May 15, 2019).

A passenger, while in her sister’s rental car, was injured in an automobile accident. The other vehicle in the accident was an uninsured motor vehicle. The rental car passenger sought to recover compensation for her injuries under her sister’s automobile policy. The UM portion of the policy covered any person occupying a “covered auto,” which the policy defined as (a) any auto or trailer shown on the declarations page of the policy, (b) any additional auto, (c) any replacement auto, or (d) any trailer owned by the named insured. The passenger argued that the policy covered the rental car as the rental car was an “additional auto” defined under the policy as an automobile for which the policyholder is the beneficial owner during a period that does not permanently replace an automobile listed on the declarations page. The trial court granted summary judgment in favor of the passenger by finding that the rental car was a “covered auto.” The insurer appealed.

The appellate court reversed and remanded. The passenger’s primary argument on appeal was that, because her sister had dominion and control over the vehicle, her sister became the beneficial owner of the rental car and the car became an “additional auto” under the policy. The court rejected this argument, concluding that the argument’s application would be too broad because it would extend to any passenger in any vehicle driven by someone with insurance. Additionally, the court noted that this interpretation conflated a temporary possessory interest in the rental vehicle with vehicle ownership. Instead, the court reasoned that beneficial ownership, even if it does not require full fee ownership, requires more than just a mere right of possession. The court concluded that the passenger’s sister was not the beneficial owner of the rental car and that the rental car was thus not a “covered auto.”