Wis. Court: Nissan Has to Pay Uninsured Lessee’s Damages

A Wisconsin appeals court has ruled that Nissan’s insurer must provide some compensation for crash damages caused by an uninsured driver of a leased Nissan vehicle despite the fact that the car company’s insurance policy included an exclusion for drivers of leased cars. The reason? Nissan never filed a certificate of insurance with the Department of Transportation after leasing the vehicle, which it was required to do by law.

The case had originally been brought to court by the two women injured in the November 2007 crash, who alleged that dueling exclusions contained in the Nissan policy effectively canceled out and then reinstated coverage for damages caused by Michael Kuester.

Kuester had leased the car 10 months earlier, but either never took the steps of getting auto insurance quotes online and purchasing a policy for the car or let the policy lapse, even though he was contractually obligated to maintain coverage.

Then, while driving the Nissan under the influence of a controlled substance in November, Kuester swerved across traffic and hit a vehicle head on, seriously injuring the driver and a passenger, according to court documents.

After finding out that Kuester was uninsured, the two occupants of the other car sought compensation from Nissan.

While Nissan’s policy contained a specific exclusion for drivers operating leased autos—since they are supposed to purchase coverage themselves—which all parties agreed excluded Kuester for coverage, the two woman claimed that a second, separate exclusion negated this first one.

The second exclusion said anyone is insured under the policy while driving the car with Nissan’s or an adult family member’s permission.

The Wisconsin 2nd District Court of Appeals ultimately disagreed with this rationale, saying the second exclusion did not cancel the first out.

However, the appeals court noted that Wisconsin law requires car companies leasing vehicles to file with the Department of Transportation a certificate verifying that the car has coverage before leasing the car out, according to court documents.

But Nissan never did this, which the court ruled makes the company’s insurance provider liable for up to $50,000 worth of bodily injury damages for the accident, which is the minimum amount of coverage required under state law.

About Matthew Morisset
Matthew Morisset is a proud alumnus of the University of Redlands, where he obtained a degree in English Literature. Utilizing his passion for analysis and writing, Matthew looks for important trends in the auto insurance industry and their implications for consumers and the market as a whole.

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