Opinion ID: 2570713
Heading Depth: 2
Heading Rank: 1

Heading: Primary or excess coverage

Text: ¶ 8 Both parties agree that, unless permitted by statute, exclusionary clauses in basic motor vehicle liability policies are void as against public policy with respect to the minimum coverage requirements set by the Financial Responsibility Act (FRA). A.R.S. § 28-4001 et seq.; see also A.R.S. § 28-2166 (requiring car rental companies to provide public liability insurance in limits of at least $15,000/$30,000). Exclusionary clauses in policies applicable to coverages in addition to or in excess of the minimum limits required by statute, however, may be valid and enforceable. Arceneaux v. State Farm Mut. Auto. Ins. Co., 113 Ariz. 216, 217-18, 550 P.2d 87, 88-89 (1976). [4] The parties argue over whether Philadelphia's coverage was primary or excess. Petitioners claim that the SLI provided additional primary liability coverage and the DUI exclusion is void because the FRA does not permit such exclusions in primary coverage. Philadelphia asserts that the coverage it provides is excess and the FRA therefore does not apply over the minimum limits, making the DUI exclusion proper and enforceable. ¶ 9 The addendum that Quintero-Lopez initialed and signed to purchase Philadelphia's SLI coverage states that it increases liability coverage up to $1,000,000 in primary liability insurance to protect against third-party liability claims made against the renter and authorized drivers for bodily injury or death and property damage caused by the use of a Value vehicle. (Emphasis added.) The text of the addendum is somewhat similar to a declarations page and sets forth no exclusions from coverageit simply directs the customer to ask your rental sales agent for additional information on provisions and exclusions. Directly above the signature line at the bottom of the one-page addendum, the following sentences appear: I have read this addendum and agree to its terms and conditions. If there are any differences between the rental agreement and this addendum, I understand that this addendum supersedes the rental agreement and will be controlling. (Emphasis added.) ¶ 10 While the addendum describes the SLI coverage as an increase in primary liability insurance, the rental contract is silent on this issue, always referring to SLI as supplemental liability insurance, without specifying whether Philadelphia's coverage is primary or excess. The brochure describing the additional coverages, however, exacerbates the confusion by, in one part, stating that supplemental liability insurance is excess automobile liability insurance while, in a different part, describing SLI as primary coverage, meaning your [own] auto insurance policy will not be called on to contribute unless the loss exceeds the maximum of $1 million. ¶ 11 These provisions make the issue unclear to us and certainly impenetrable to the average consumer. We doubt that the ordinary car rental customer is informed about insurance to the degree that such a distinction, if it could be made, would be either important or meaningful. Complicating the issue is the fact that two insurers are involved. According to a Certificate of Self Insurance filed by Value with the Arizona Department of Insurance, Value was self-insuring the $15,000/$30,000 coverage it was required to provide its renters under A.R.S. § 28-2166. See ¶ 8, supra. Thus, additional coverage was provided by Philadelphia and presented to Value's renters through three documents: the addendum, the brochure, and the rental agreement. As discussed above, the addendum called the coverage primary, the brochure referred to it as excess but then said it was an increase in primary liability insurance, [5] and the rental agreement said nothing. It is only when one is able to review the terms of the policy Philadelphia issued to Value that it becomes clear that Philadelphia intended the SLI coverage provided to renters to be excess. [6] Of course, a copy of that policy was not provided to Quintero-Lopez. Regardless, we need not determine what difference, if any, results from resolution of the primary-excess issue because this case is more properly analyzed under the doctrine of reasonable expectations.