Louisiana Court Holds Insurer’s “Garage Policy” Offered Car Service Repair but did not Provide Coverage to Plaintiff Injured in Two-Car Collision

dealership insurance coverage

In an insurance coverage dispute following a car accident, the Louisiana Third Circuit affirmed a judgment finding that the plaintiff was not insured under either insurance policy, and it dismissed her claims against the insurance company.  A “garage policy” had been issued to a car dealership that provided uninsured motorist coverage and medical payment coverage.   The issue in this case was whether the plaintiff was in fact “insured” for the pdealershipurposes of UM coverage.  Specifically, the court here looked at the policy language defining coverage and whether the definition of “insured” violated Louisiana law.

In Lake Charles, Louisiana, in August 2013, the plaintiff in this case was involved in a two-car auto accident on I-210.  She contended that she suffered injuries as a result of the accident.  At the time of the accident, the plaintiff had been driving a borrowed car from Service Chevrolet, while her own car underwent repairs. A “garage policy” had been issued to Service Chevrolet, and the car driven by the plaintiff was a “covered auto” under the policy.

The plaintiff settled her claims against the other driver and the other driver’s insurer.  She then pursued a claim against the insurance company for Service Chevrolet for the remaining damages under the uninsured/underinsured (UM) “garage policy” and the medical payments coverage.  The insurer moved for summary judgment, contending that the plaintiff was not “insured” because she maintained her own insurance.  The trial court agreed and granted summary judgment.  The plaintiff appealed.

The appellate court stated the rule set forth by the Louisiana Supreme Court that UM insurance attaches to the person, rather than the vehicle. The plaintiff contended that the policy did not define who was “insured” for UM coverage, and it was therefore ambiguous.  She argued that granting summary judgment in favor of Tower Insurance was an error. But the court stated that if the plaintiff had not been insured for liability coverage under the policy, she was not insured for UM coverage.

The plaintiff argued that the exclusion for permissive drivers under the garage policy violated Louisiana law.  But the court here noted that the plaintiff had insurance in the statutorily required minimum.  Citing precedent, the court stated that excluding customers who maintained the statutorily required minimum from the definition of insured under a “garage policy” did not go against public policy.

Next, the court addressed the plaintiff’s contention that since she sought medical expenses for treating her injuries, rather than “bodily injury” benefits, the exclusion set forth in the policy did not apply.  The court noted the policy clearly denied coverage for payments of medical expenses relating to injuries from the use of an auto.  Here, the plaintiff suffered injuries while using an auto, and therefore, the court stated, medical payment coverage did not apply.

The court dismissed the plaintiff’s claims, affirming the judgment.

At Lavis Law, our skilled Louisiana insurance attorneys help clients try to resolve insurance coverage disputes.  Some disputes follow automobile accidents, adding to financial and emotional stress.  We can help, and we offer a complimentary consultation. Call our office at 866.558.9151.

More Blog Posts:

Appellate Court Affirms Decision in Favor of Car Insurer, Holding Exclusion Valid Under Louisiana Law, Louisiana Insurance & Injury Lawyer Blog

Louisiana Court Holds Auto Insurance Company Not Liable for Property and Personal Injury Damage Caused During Driver’s Attempt to Escape Police, Louisiana Insurance & Injury Lawyer Blog

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