A 2008 decision by the Superior Court Department of Massachusetts determined that a self-insured owner of a rental vehicle was entitled to seek subrogation for personal injury protection benefits “as a result of an accident that was the fault of the operator.”
In June, 2001, Joseph Navis rented an automobile from Enterprise, which owned and self-insured the automobile. While driving the rented vehicle, he was involved in an accident with another automobile that caused injury to three passengers in his car as well as himself. Enterprise paid the three passengers a total of $16,171.60 in personal injury protection (PIP) benefits.
Enterprise contended that it was entitled to subrogation from the rented car driver’s policy with Metropolitan or the other driver’s policy with Arbella Insurance, and filed for the appointment of an arbitrator. However, the case was transferred to the Superior Court Department where it was determined that Enterprise’s “contention that the determination has to be made by an arbitrator and not by a court is not persuasive.”
By statute, automobile rental companies are required to provide PIP benefits to guest occupants of its motor vehicles. In this case, Enterprise sought reimbursement for the PIP benefits paid to the three passengers since the operator (Navis) was at fault for the accident. The court ruled Enterprise eligible to maintain its claim for subrogation, since “subrogation comes into play where another insurer’s owner or operator is at fault for the accident.” In order to prevail in its request, Enterprise still needed to establish that the rentee (Navis) was liable, but the court ruled that it was indeed eligible if liability could be proven.