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Alzharani v. Pacific International Services Corp.9/17/1996
lzharani's argument, however, is fundamentally flawed for two principal reasons.
First, as a basic proposition, PISC is not an "insurer" as defined by HRS § 431:10C-103(5), and the vehicle rental agreement is not a contract of insurance. As we recently noted in Budget Rent-A-Car v. Coffin, 82 Haw. 351, 922 P.2d 964(1996),
HRS § 431:10C-103(5) defines "insurer" as "every person holding a valid certificate of authority to engage in the business of making contracts of motor vehicle insurance in this State." [The car rental company] however, is not "in the business of making contracts of motor vehicle insurance"; to the contrary, [the car rental company] is merely the "owner" of several motor vehicles that it permits others to use for a fee. To hold otherwise would effectively render all car rental companies doing business in Hawai'i "insurers," regardless of whether they are self-insurers or not, generally subjecting them to the requirements of HRS chapter 431, and to the regulatory control of the insurance commissioner and the Department of Commerce and Consumer Affairs.
With respect to this distinction . . . any car rental company . . . bestows permission to use a rental vehicle upon its customers, albeit for a fee, and dictates the scope of the renter's permissive use by its contract with its customers. In other words, the rental agreement is not a contract of insurance, and is not the source of the customer's entitlement to insurance coverage ; the customer is statutorily entitled to the minimum motor vehicle insurance coverage required by HRS § 431:10C-301. In this light, . . . the rental agreement does not independently confer any insurance coverage . . . and . . . the rental company is not an "insurer" as defined by HRS § 431:10C-103(5).
Id., slip op. at 11-12 (emphasis added) (footnotes omitted). PISC, therefore, is not subject to the provisions of HRS § 431:10C-301(b)(3) and (4) that require insurers to offer UM coverage to parties with which it enters into contracts of insurance.
Second, as we also noted in Coffin, "all putative insureds who . . . operate motor vehicles pursuant to a car rental contract . . . gain entitlement to a potential for insurance coverage applicable to the rental vehicle as permissive users." Id., slip op. at 10 (emphasis added). Alzharani's position, taken to the extreme in the permissive use context, would effectively require all insurers of motor vehicles covered by no-fault insurance policies that are lent to other drivers to offer UM and UIM coverage to the permissive user. We decline to adopt Alzharani's position and hold that PISC is not required to provide UM or UIM benefits to Alzharani.
In view of our holdings, we need not reach Alzharani's additional arguments that: (1) because PISC was obligated to offer him UM coverage and did not, UM coverage automatically applies pursuant to our decision in Mollena ; and (2) the circuit court erroneously dismissed his claims based on breach of the duty of good faith and fair dealing inherent in all contracts of insurance.
IV. Conclusion
Based on the foregoing, the judgment and orders of the circuit court are affirmed.
Ronald T. Y. Moon
Robert G. Klein
Steven H. Levinson
Paula A. Nakayama
Mario R. Ramil
Page 1 2 3 4 5 6 Hawaii Personal Injury Attorneys
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