“The Vehicle Must Be Yours”: Erie Insurance v. Cooper and the New Limits on Mandatory UIM Offers for Non-Owned Vehicles

1. Introduction

Erie Insurance Property & Casualty Company v. James Skylar Cooper (4th Cir. 2025) settles a thorny question of West Virginia insurance law: Must an insurer issuing a commercial automobile policy that extends liability coverage to a class of “non-owned” autos also offer underinsured-motorist (UIM) coverage for those same vehicles? The Court of Appeals for the Fourth Circuit, applying an answer it solicited from the Supreme Court of Appeals of West Virginia, says “no.” The decision reverses the district court, denies coverage to an injured passenger, and redraws the boundary between liability and UIM obligations in employer policies that insure employee-owned vehicles only for vicarious liability.

The key actors are:

• Erie Insurance Property & Casualty Company – the commercial auto insurer.
• Pison Management, LLC – the named insured, an employer with two company vans (the “owned vehicles”) and a fleet of employee-owned autos temporarily insured for business errands (the “non-owned” class).
• James Skylar Cooper – Pison employee injured while riding in co-worker Rick Huffman’s personal car.

2. Summary of the Judgment

The Fourth Circuit vacated the district court’s award of UIM benefits to Cooper and remanded with instructions to enter judgment for Erie. Relying on the West Virginia high court’s answer to a certified question, the panel held:

1. Cooper is not an “insured” for UIM purposes under W. Va. Code §33-6-31(c) because the motor vehicle in which he rode was not one that Pison could legally “consent” to his use of; only vehicles owned or controlled by Pison fall within that phrase.
2. Because Cooper is not an insured, Erie had no statutory duty to offer UIM coverage for the class of non-owned vehicles; therefore no coverage arises “by operation of law.”

3. Analysis

3.1 Precedents Cited

• Progressive Max Ins. Co. v. Brehm, 873 S.E.2d 859 (W. Va. 2022)
  Clarified the two-class system of UIM insureds. Provided analytical scaffolding for distinguishing “Class I” (household) from “Class II” (permissive user) insureds.
• Starr v. State Farm Fire & Cas. Co., 423 S.E.2d 922 (W. Va. 1992)
  Recognized the broad protection for Class I insureds versus the vehicle-specific nature of Class II status.
• Stone v. Liberty Mutual Ins. Co., 478 S.E.2d 883 (Va. 1996)
  Virginia Supreme Court decision interpreting identical language (“uses the motor vehicle to which the policy applies, with the consent…”)—a persuasive analogue adopted by West Virginia.
• Thomas v. McDermitt, 751 S.E.2d 264 (W. Va. 2013)
  Explains that optional coverages not properly offered are read into the policy by operation of law. The district court leaned on this case; the Fourth Circuit limited its reach.
• Keystone Ins. Co. v. Fidelity & Cas. Co. of N.Y., 260 A.2d 275 (Md. 1970)
  Cited for the proposition that one cannot grant “permission” to use a car one does not own or control.

3.2 Legal Reasoning

The statutory analysis turned on a single phrase in §33-6-31(c): “any person… who uses, with the consent, expressed or implied, of the named insured, the motor vehicle to which the policy applies.” The court reasoned:

1. The named insured must be able to grant or withhold use of the vehicle. That power presupposes ownership or possessory control.
2. Where the vehicle is employee-owned, the employer lacks such power; it can direct the employee to drive but cannot grant legal permission in the insurance sense.
3. Statutory reference to “the motor vehicle” (singular, definite article) signifies a particular auto listed for coverage, not a floating category of many autos.
4. Therefore, Class II status—and hence the right to statutory UIM—exists only when the claimant occupied or used a vehicle owned by (or possessed/controlled by) the named insured.
5. Erie’s policy provided liability coverage to the non-owned class solely to protect Pison against respondeat superior claims, not to benefit those vehicle owners or passengers. The statute does not convert that vicarious-liability protection into personal UIM insurance for non-owned drivers or passengers.

3.3 Impact on Future Litigation and Practice

The decision carries several significant implications:

• Underwriting Practices – Insurers writing West Virginia commercial policies may continue to extend liability coverage to non-owned autos without simultaneously offering UIM; premium structures remain bifurcated.
• Employer Risk Management – Employers who rely on employees’ personal vehicles for business must secure separate optional UIM endorsements if they wish to protect employees beyond personal auto limits.
• Litigation Strategy – Plaintiffs can no longer invoke Thomas v. McDermitt to judicially reform policies for non-owned vehicles; they must show Class I status or that the accident involved an owned vehicle.
• Statutory Interpretation Canon – Emphasizes textual primacy, the significance of definite versus indefinite articles, and the embedded concept of “permission.”
• Inter-jurisdictional Harmony – Aligns West Virginia with Virginia’s Stone rule, fostering regional uniformity along the Fourth Circuit corridor.

4. Complex Concepts Simplified

• Class I vs. Class II Insureds
  Class I: Named insured, spouse, resident relatives—covered everywhere, even as pedestrians.
  Class II: Anyone using a vehicle owned/controlled by the named insured with permission—coverage tied to that specific vehicle.
• Non-Owned Auto Liability Coverage
  Protects the employer (named insured) against lawsuits when employee-owned cars are driven on company business. It is not personal insurance for the employee.
• Underinsured Motorist (UIM) Coverage
  Pays the insured the difference between the at-fault driver’s liability limit and the insured’s damages, up to the UIM limit.
• “Operation of Law” Reformation
  Courts can insert statutorily required coverages into a policy if the insurer failed to offer them correctly. Here, reformation was not triggered because the statute did not mandate a UIM offer for non-owned vehicles.

5. Conclusion

Erie Insurance v. Cooper crystallizes a decisive rule: West Virginia insurers are not statutorily obligated to offer underinsured-motorist coverage for non-owned vehicles included only for vicarious liability purposes. The ruling reinforces the two-class framework of §33-6-31, ties Class II status to the insured’s ownership or control, and realigns coverage expectations for employers, employees, and insurers alike. By rejecting the district court’s broader reading, the Fourth Circuit—guided by the state’s highest court—narrows the gateway to UIM benefits, ensuring that the availability of such coverage remains anchored to vehicles the policyholder truly commands. Future disputes will likely pivot on ownership and control, not merely on whether a liability premium was charged.