A rented Lamborghini worth $200 000, which collided with a tree and was totaled, was not covered under a personal motor policy because the policy did not cover a “vehicle rented to or used by” an insured, and also excluded loss to any ‘non-owned auto’ when used by the named insured or any family member “without reasonable belief that they were entitled to do so”. The policy was taken out by the Montez parents who had two daughters. One daughter (“the Renter”) drove the Lamborghini to New York City to meet up with her sister on her sister’s 20th birthday and the sister’s boyfriend. The Renter permitted the boyfriend to take the Lamborghini for a ride with the sister as passenger. Within minutes, the Lamborghini crashed into a tree.

A “family member” was “a person related to you by blood, marriage or adoption who is a resident of your household”. That included the sisters but not the driver. A “covered auto” included specified vehicles and any “newly acquired auto” but that did not fit the rented auto into the policy.

The collision exclusion also applied. The rental agreement prohibited the driving of the vehicle by an unlicensed driver or the sister who was underage. Neither the Renter nor the sister could have reasonably believed that they were entitled to use the Lamborghini in the manner that they did.

The insurer was granted a declaration of no coverage.

[California Casualty & Fire Insurance Co v Montez and others case no 2:22-cv-02941 in the US District Court for the District of New Jersey]