In Clayborne v. Enterprise, Parker rented a car from Enterprise.  Parker declined insurance coverage and supplemental insurance when he rented the car.  Then he was in an accident and hit Clayborne.  Enterprise declined to defend the subsequent suit which Parker claimed was bad faith.  But summary judgment to Enterprise was affirmed.  Enterprise and ELCO (Enterprise’s self insured administrator) satisfied the only duty of coverage they had —  a statutory duty under the MVFRL (motor vehicle financial responsibility laws) to provide the minimum amount of $25,000 to third party Clayborne.

Enterprise is a self-insured car rental company and not an insurance company. Under the MVFRL, Enterprise, as a self-insured entity, only had a duty to pay third parties injured by the renters of its vehicles, and had no separate and independent duty to provide [Parker] as a renter with a defense or settle claims brought against him unless [Parker] so chose, which he was given an opportunity to do and affirmatively declined to do in two separate places in his rental agreement. Since Enterprise is not an insurance company, [Parker] paid Enterprise no premiums for insurance coverage, and the rental agreement did not subject Enterprise to any duties to defend or indemnify [Parker], [Parker’s] breach of contract and bad faith claims against Enterprise and ELCO fail as a matter of law and undisputed fact. Neither Enterprise nor ELCO had a contractual duty under the rental agreement or a statutory duty under the MVFRL to defend [Parker], and neither the rental agreement nor the MVFRL gave Enterprise or ELCO the exclusive right to contest or settle any claims against him or prohibited him from voluntarily assuming any liability or settling any claims against him without Enterprise’s consent.

Enterprise was not Parker’s liability insurer, and its only duty was to pay under the MVFRL, which it did.  Summary judgment was affirmed.