The 11th circuit U.S. Court of Appeals ruled on Jan. 9 that in Garcia v. Geico General Insurance Co., the insurance company is still responsible for coverages in a fatal collision involving one of its customers, even though the customer was not the original renter of the vehicle from Enterprise Rent-A-Car.

The decision reversed and remanded a district court decision that said Geico was not responsible, which means the case will return to the district court so that a judgment can be recorded.

The Appeals Court ruled in precedence to a recent case in Florida, Chandler v. Geico Indemnity Co., outlining that even though the driver may not have had direct permission to drive the vehicle directly from the “owner” — in these cases the car rental companies — the insurance company must still insure the vehicle.

The difference between the two cases is that in Chandler v. Geico, the original renter’s insurance company was considered responsible for coverages; however, in Garcia v. Geico, the original renter did not have insurance, nor did he purchase liability insurance through Enterprise. The driver at the time of crash, on the other hand, did have insurance, and under his policy with Geico, coverages included those for a “non-owned auto,” which in this case was the rental car.

Geico claimed, as it did in the Chandler case, that because express permission wasn’t given by the car rental company that it did not have to insure the vehicle. “Chandler instructs that the broad definition of ‘permission’ developed in Florida’s dangerous instrumentality cases is applicable to contractual insurance disputes, such as the one at hand,” said the official court opinion, adding that the district court did not apply the correct definition of “permission.”

For the original court opinion, click on the URL: http://www.ca11.uscourts.gov/unpub/ops/201012825.pdf