Vehicle-Specific Liability Coverage Upheld:
Scott v. Nationwide Agribusiness and the Colorado “Vehicle-Oriented” Liability Principle

1. Introduction

Scott v. Nationwide Agribusiness Insurance Company, No. 24-1358 (10th Cir. Jun. 25 2025), presents a significant clarification of Colorado insurance law: an automobile insurance policy may condition liability coverage on the use of vehicles specifically designated in the policy without violating Colorado’s public policy, even where the driver is otherwise an “insured” resident relative of the named insured.

The plaintiff, Le’Onsha Scott, suffered serious injuries in 2018 when her car was struck by a vehicle driven by Ellen Cahill. Cahill admitted fault and was insured under (1) her own Hartford policy covering the Hyundai Ioniq she was driving and (2) her son John Duggan’s policy with Nationwide Agribusiness Insurance Company that covered two different vehicles (a 2009 Hyundai Sonata and a 2017 BMW 540xi). After an arbitration award of $424,140.26, Hartford paid its $25,000 limit. Nationwide denied indemnification of the remaining balance because Cahill’s Ioniq was not a “declared vehicle” under the Nationwide policy.

Scott sued Nationwide for declaratory relief, contending that limiting liability coverage to listed vehicles contravenes Colorado’s compulsory insurance scheme. The district court granted summary judgment to Nationwide; the Tenth Circuit now affirms.

2. Summary of the Judgment

• The court reviews de novo and holds that Colorado statutes and precedent permit insurers to tie liability coverage to specifically identified vehicles.
• The definition of “insured” in Colo. Rev. Stat. § 10-4-601(5) does not transform every “resident relative” into a person whose liability is covered irrespective of the vehicle operated.
• Colorado’s statutory framework—particularly § 10-4-619, § 10-4-620, and § 42-7-413—contemplates vehicle-oriented liability insurance; the policy’s limitation therefore comports with public policy.
• Precedent relied on by Scott, especially the Tenth Circuit’s Pacheco v. Shelter Mut. Ins. Co., applies only in the UM/UIM context, which is person-oriented, and is inapposite here.
• Summary judgment for Nationwide is affirmed and Scott’s request for appellate costs denied.

3. Analysis

3.1 Precedents Cited and Their Influence

Key authorities referenced include:

• DeHerrera v. Sentry Ins. Co.
• Allen v. USAA
• Farmers Ins. Exch. v. Anderson
• Apodaca v. Allstate
• Mid-Century v. Robles
• Pacheco v. Shelter Mut. Ins. Co.

3.2 The Court’s Legal Reasoning

1. Statutory Text Controls. Sections 10-4-601(10), 10-4-619, and 10-4-620 repeatedly refer to “the motor vehicle” covered by “a complying policy,” signalling legislative approval of vehicle-specific liability coverage.
2. No Statutory Prohibition. Colorado law does not oblige insurers to cover every liability of every insured irrespective of the vehicle operated. Absent such a mandate, Allen permits contractual limitations.
3. Policy Rationale. Insurance premiums correlate to vehicle characteristics (year, make, model). Requiring insurers to cover all personal liabilities of all resident relatives regardless of the vehicle would disrupt this actuarial foundation.
4. Distinguishing UM/UIM Caselaw. Unlike liability coverage, UM/UIM statutes explicitly protect “persons insured under the policy.” Thus, Pacheco cannot be exported wholesale to liability disputes.

3.3 Potential Impact

The decision solidifies a vehicle-oriented liability principle in Colorado federal courts, likely to be persuasive in state courts as well. Insurers may continue drafting policies that:

• Extend liability coverage only when an insured operates a vehicle named in the declarations (subject to traditional exceptions for new or temporary replacement vehicles).
• Rely on resident-relative clauses without exposing themselves to unlimited liability for non-scheduled vehicles.

Policyholders and practitioners must pay closer attention to the “Declarations” page: if the vehicle is not listed, liability coverage may not attach even when the driver is an “insured.” Future litigation may test the outer bounds—e.g., ride-sharing scenarios, permissive use of rental cars—but Scott provides insurers with substantial support.

4. Complex Concepts Simplified

• Resident Relative: A family member who lives with the named insured; automatically an “insured” for certain purposes, but not immune to policy limitations tied to the vehicle driven.
• Vehicle-Oriented vs. Person-Oriented Coverage: Liability insurance attaches to operation of specified vehicles; UM/UIM attaches to individuals (regardless of vehicle).
• Complying Policy (§10-4-619): A policy that meets Colorado’s minimum liability limits for each covered vehicle.
• Summary Judgment: A procedural device allowing judgment without trial where no genuine factual disputes exist.

5. Conclusion

Scott v. Nationwide reinforces insurers’ ability in Colorado to draft vehicle-specific liability policies without running afoul of public policy, even when resident relatives are involved. By anchoring its analysis in statutory text and distinguishing person-oriented UM/UIM precedent, the Tenth Circuit offers a well-reasoned template for reconciling contractual freedom with statutory mandates. Going forward, attorneys advising policyholders should ensure that all regularly operated vehicles are declared on their clients’ policies, while insurers can rely on Scott to defend vehicle-based limitations—provided they do not attempt to narrow the statutory definition of “insureds.”