Sentry Select Insurance v. Fidelity & Guaranty Insurance

Pursuant to rule 8.548 of the California Rules of Court, we granted the request of the United States Court of Appeals for the Ninth Circuit to address the following question: What is the appropriate test for determining whether an insured is “engaged in the business of renting or leasing motor vehicles without operators” under Insurance Code, section 11580.9, subdivision (b)?

Under the version of Insurance Code section 11580.9, subdivision (b) (former subdivision (b)) controlling in this case, if a leased commercial vehicle is involved in an accident with one or more other vehicles, and its owner, the insured, is “engaged in the business of renting or leasing motor vehicles without operators,” then the insured’s policy is conclusively presumed to be excess to any other insurance covering the loss. The rule is part of a statutory scheme intended to establish workable, bright-line rules for allocating loss among coinsurers in the context of liability policies covering multiple-vehicle accidents. The public policy behind section 11580.9 is to avoid conflicts, litigation, and resulting court congestion in the determination of which liability policies covering multiple…