Insurance — motor vehicle accident — leased vehicle — coverage

Listen to this article

Wisconsin Court of Appeals

Civil

Insurance — motor vehicle accident — leased vehicle — coverage

Where an automobile lessee fails to maintain liability insurance and subsequently injures other persons as a result of a motor vehicle accident, by the terms of the lessor-automobile manufacturer’s insurance policy, there is no coverage for injuries caused by lessees; but because the manufacturer failed to file a certificate of insurance with the Department of Transportation when it leased the car, its insurer is liable for up to the statutory minimum amounts of coverage of $25,000 per person and $50,000 per accident.

The policy terms do not provide coverage. The policy contains a “Contingent Coverage for Leased Autos” endorsement, which excludes coverage for “any person operating a leased auto.” Both parties agree that the lessee, falls within this exclusion. The policy also contains a two-page endorsement called “Wisconsin Changes,” which provides that “[t]he following is added to Who Is An Insured: Anyone else is an ‘insured’ while using a covered ‘auto’ [Nissan] own[s] with [Nissan’s] or any adult ‘family member’s’ permission.” Brown and Eulenbach argue that the Wisconsin Changes endorsement is an exception to the lessee exclusion and thus brings Kuester back under the Tokio Marine policy. We disagree. An exception pertains only to the exclusion clause within which it appears. The Wisconsin Changes endorsement is separate from the lessee exclusion endorsement. The Wisconsin Changes endorsement says nothing about lessees and thus is unrelated to the lessee exclusion endorsement. The applicability of an exception will not create coverage if the insuring agreement precludes it or if a separate exclusion applies.

In addition, the omnibus coverage statute does not mandate coverage as § 632.32(5)(e) allows an insurance policy to provide for exclusions, such as those present in this case.

However, § 344.51(1m) requires a lessor, before leasing a vehicle, to file a certificate with the Department of Transportation verifying that the vehicle has liability insurance. We agree with Brown and Eulenbach that Nissan violated this statute when it leased a vehicle to Kuester without filing a certificate of insurance with the Department of Transportation. Section 344.51(1m) mandates coverage by the lessor in the amounts set forth in § 344.01(2)(d), which are $25,000 per person and $50,000 per accident.

Affirmed. Recommended for publication in the official reports.

2011AP454 Brown, et al. v. Tokio Marine, et al.

Dist II, Reilly, J., Kenosha County, Bastianelli, Wilk, J.J.

Attorneys: For Appellant: DuMez, Robert I., Kenosha; For Respondent: Fertl, Jeffrey S., Milwaukee; Lauritch, Melissa J., Milwaukee; Kuester, Michael, pro se