SOUTHEASTERN FIDELITY INS. CO., PETITIONER,
v.
MARK COLE, ET AL., RESPONDENTS
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The Florida Supreme Court resolved a conflict among district courts regarding insurance policy priorities in automobile leasing situations. The court held that when a lessor's insurer (Southeastern) and lessee's insurer (State Farm) both issued policies covering the same accident, the lessor's insurer must provide primary coverage for the first $10,000 unless the burden was properly shifted to the lessee, and the lessor's policy must be exhausted before the lessee's excess policy applies.
The lessor's insurer (Southeastern) must provide the first $10,000 of coverage because the lessor (Holiday) failed to properly shift the burden of primary insurance to the lessee under section 627.7263, Florida Statutes. The Southeastern policy must be exhausted in its entirety before the State Farm policy applies, because neither company is entitled to indemnity from the other and policy language controls. The purported 'other insurance' clause in the rental agreement is not valid and cannot be incorporated into the insurance contract.
[1] The insurer of the owner/lessor of a vehicle must provide the first $10,000 of coverage unless the burden of primary insurance is properly shifted to the lessee.
[2] In the absence of a valid shift of primary insurance burden, the lessor's insurer is responsible for the initial $10,000 of coverage.
Previewing 2 of 5 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“The insurer of the owner/lessor must provide the first $10,000 worth of coverage unless the owner/lessor has properly shifted the burden of primary insurance to the lessee pursuant to section 627.-7263, Florida Statutes (1981).”
Establishes the foundational rule that the lessor's insurer provides primary coverage for the initial $10,000 unless the lessor took affirmative steps to shift this burden.
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Join FLexlaw to unlock all legal intelligenceMark Cole leased a car from Holiday Rent-A-Car and was involved in an accident while driving the leased vehicle. Cole had his own automobile insurance…
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ADKINS, Justice.
We have for review Cole v. Southeastern Fidelity Insurance Co., 469 So. 2d 925 (Fla. 3d DCA 1985), which, at the time of its rendition, directly conflicted with many district court and Supreme Court decisions relating to priorities among insurance policies in automobile leasing situations. We take jurisdiction, article V, section 3(b)(3), Florida Constitution.
Mark Cole leased a car from Holiday Rent-A-Car (Holiday), and was involved in an accident while driving the vehicle. State Farm Mutual Insurance Company (State Farm) insured Cole. Southeastern Fidelity Insurance Company (Southeastern) insured Holiday. Cole, a permissive user of the leased vehicle, was an additional insured under the Southeastern policy. Both the State Farm and Southeastern policies expressly provide that they are excess policies in regard to non-owned vehicles.
We must apply the law as set forth in Allstate Insurance Co. v. Fowler, 480 So. 2d 1287 (Fla.1985); Metropolitan Property and Life Insurance Co. v. Chicago Insurance Co., 479 So. 2d 114 (Fla.1985); and Maryland Casualty Co. v. Reliance Insurance Co., 478 So. 2d 1068 (Fla.1985), to the facts of this case.
The insurer of the owner/lessor must provide the first $10,000 worth of coverage unless the owner/lessor has properly shifted the burden of primary insurance to the lessee pursuant to section 627.-7263, Florida Statutes (1981). Fowler; Maryland Casualty Co.. Holiday failed to shift the burden of primary insurance to Cole. As a result Southeastern, Holiday’s insurer, must provide the first $10,000 worth of coverage.
State Farm issued a policy directly to Cole and Southeastern insured Cole as an additional insured. Thus, policy language will control the determination of the next level of coverage because neither company is entitled to indemnity. See Fowler; Metropolitan Property. We fully recognize the provision in State Farm’s policy which provides that it only furnishes excess coverage on non-owned vehicles. State Farm’s insured, Cole, was driving a non-owned vehicle. Therefore, the Southeastern policy must be exhausted before the State Farm policy can be reached. We reject Southeastern’s argument that the following provision found on the back of the lease agreement between Holiday and Cole requires State Farm to provide the layer of insurance immediately following the first $10,000 worth of coverage:
5. INSURANCE: Vehicle is covered by an automobile liability insurance policy, a copy of which is available for inspection at main offices of Holiday Rent-A-Car System. Said policy provides coverage and limits of liability at least equal to the liability coverage and limits of liability required of the operator to satisfy this* state’s financial responsibility motor vehicle laws, but only if no other valid and, collectable insurance, whether primary, excess or contingent, is available to Renter. This provision is not a valid “other insurance” clause. Rather, the clause in question represents a failed attempt to describe the Southeastern policy as it existed in the main offices of Holiday Rent-A-Car. TheSoutheastern policy does not contain an “other insurance” clause despite the fact t that the provision in the rental agreement says it does. We will not incorporate an “other insurance” clause into the insurance contract between Southeastern and Holiday merely because a rental agreement between Holiday and Cole mistakenly claimed that such a clause exists. Thus, Southeastern’s entire policy must be exhausted before the State Farm policy can be reached.
Accordingly, we approve the decision of the district court.
It is so ordered.
MCDONALD, C.J., and BOYD, OVER-TON, EHRLICH, SHAW and BARKETT, JJ., concur.
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Allstate Ins. Co. v. RJT Enters., Inc., 692 So. 2d 142 (Fla. 1997)…of a Florida-registered motor vehicle to shift the burden of providing primary liability coverage to the lessee’s insurance carrier when the lessee in fact has a primary liability insurance carrier.” See also Southeastern Fidelity Ins. Co. v. Cole, 493 So. 2d 445, 446 (Fla.1986); State Farm Mut. Auto. Ins. Co. v. Lindo’s Rent-A-Car, Inc., 588 So. 2d 36, 37 (Fla. 5th DCA 1991); International Ins. Co. v. Ryder Truck Rental, Inc., 555 So. 2d 1250, 1251 (Fla. 3d DCA 1989), review denied, 564 So. 2d 487 (Fla.1990…
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Chrysler Credit Corp. v. United Servs. Auto. Ass'n, 625 So. 2d 69 (Fla. 1st DCA 1993)…policy providing umbrella liability coverage into one providing primary coverage by merely entering into ear rental agreement that purports to shift primary liability to the lessee’s auto insurance carrier); Southeastern Fidelity Insur. Co. v. Cole, 493 So. 2d 445 (Fla.1986). When Bruce Hagen assigned to H-K Leasing his rights to the liability insurance policy provided to him by U.S.A.A., the assignee took that assignment subject to the specific [*74] language in the policy engrafting the family member exclus…
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Snider v. Cont'l Ins. Co., 519 So. 2d 12 (Fla. 5th DCA 1987)…ance policy will not cover a lessee who operates the vehicle in violation of the rental agreement. However, a rental agreement provision cannot be relied on to establish the provisions of the insurance policy. Southeastern Fidelity Ins. Co. v. Cole, 493 So. 2d 445, 447 (Fla.1986). It is the specific language of the policy, not the rental agreement, which controls the order of insurance payments. Continental’s insurance policy insures the lessee regardless of whether the lessee operated the vehicle in violatio…
Previewing 3 of 7 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Allstate Ins. Co. v. Fowler, 480 So. 2d 1287 (Fla. 1985)
- Metro. Prop. & Life Ins. Co. v. Chicago Ins. Co., 479 So. 2d 114 (Fla. 1985)
- THE Florida BAR v. Ollinger, 478 So. 2d 1068 (Fla. 1985)
- Md. Cas. Co. v. Reliance Ins. Co., 478 So. 2d 1068 (Fla. 1985)
- Cole v. Se. Fid. Ins. Co., 469 So. 2d 925 (Fla. 3d DCA 1985)