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Insurance – Auto – UIM Stacking – Rental Car – Replacement Vehicle – Policy Ambiguity 

Because the petitioner-insurer’s auto policy is ambiguous as to whether or not a rental vehicle – when it temporarily replaces an owned vehicle – is considered an owned vehicle, we construe the policy against the drafter and conclude that the respondent-insured is entitled to stack her underinsured motorist coverages. 

We modify and affirm the Court of Appeals’ reversal of the circuit court’s decision in favor of the insurer. 

Respondent’s vehicle was damaged in an accident that was not her fault. The at-fault driver’s insurance company provided her with a rental car to drive while her vehicle was being repaired. 

While driving the rental car, respondent was involved in another accident that was not her fault. At the time, respondent had five separate auto insurance policies with petitioner. At issue is whether she can stack those policies’ underinsured motorist (UIM) coverages. 

Stacking enables the insured to recover under more than one policy. An individual must be a Class I insured in order to stack. A Class I insured is an insured or named insured who has a vehicle in the accident. An insured is a Class II insured if none of his vehicles are involved in the accident. 

Here we are asked to determine whether respondent, as the operator of a rental car, is a Class I or Class II insured. The General Assembly has set forth this delineation between Class I and Class II: “If none of the insured’s or named insured’s vehicles is involved in the accident, coverage is available only to the extent of coverage on any one of the vehicles with the excess or underinsured coverage.” 

The possessive relationship—”Insured’s…vehicle”—means something less than ownership. However, the relationship between driver and vehicle must be sufficient to make the possessive language logical. 

Accordingly, the parties may contract for the coverage of certain, specifically defined vehicles; rental cars could be covered by the policy, but the statute in no way mandates that result. Thus, we must look to the policy itself to determine whether the parties intended respondent’s relationship to her rental car be sufficient to render her a Class I driver, able to stack. 

At issue is precisely where a car that is “not non-owned,” as temporary substitute cars are reasonably articulated to be, fits within this policy. 

The parties’ policy provides, in part, “Temporary Substitute Car means a car that is in the lawful possession of the person operating it and that . . . replaces your car for a short time while your car is out of use due to its: a. breakdown; b. repair; c. servicing, d. damage; or e. theft; and neither you nor the person operating it own or have registered. If a car qualifies as both a non-owned car and a temporary substitute car, then it is considered a temporary substitute car only. . . .” 

“If a car qualifies as both a non-owned car and a temporary substitute car, then it is considered a temporary substitute car only.” 

Respondent contends the only apparent purpose of this sentence is to remove temporary substitute cars from the consequences of being non-owned cars. While normally all temporary cars would be considered non-owned because, as petitioner points out, they are by their definition not owned, the policy ostensibly exempts them from this consequence by denominating them temporary substitute cars only. 

On one hand, temporary substitute vehicles are not-owned, but on the other, the policy clearly states they are not to be considered non-owned. Thus, both a finding of coverage and a finding against coverage could be reasonably supported by a reading of the policy language concerning non-owned and not non-owned. 

Because it has diametrically-opposing yet reasonable interpretations, the policy is ambiguous and, construing the provision against the drafter, respondent will be permitted to stack her UIM coverage. 

Affirmed as modified. 


(James, J.) Policy paragraph 3 prohibits stacking if the insured is injured while occupying a vehicle that is not “owned by” the named insured, his or her spouse, or resident relative. This paragraph unambiguously prohibits respondent from stacking and does not violate S.C. Code Ann. § 38-77-160. 

State Farm Mutual Automobile Insurance Co. v. Windham (Lawyers Weekly No. 010-045-22, 16 pp.) (Kaye Hearn, J.) (George James, J., joined by John Few, J., dissenting) Appealed from Lexington County Circuit Court (Thomas Cooper, J.) Alfred Johnston Cox and Jessica Ann Waller for petitioner; Stephen Cook and John Koon for respondent. S.C. S. Ct. 

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