Hertz Corp. v. Babayev.

2026 CO 26. No. 24SC183. Statutory Insurer—Common Law De Facto Insurer—Motor Vehicle Rental Companies—Insurer’s Nondelegable Duty of Good Faith and Fair Dealing—Bad Faith Insurance Claims—CRS § 10-1- 102(13), (15)—Passamano v. Travelers Indemnity Co.—Cary v. United of Omaha Life Insurance Co.—Riccatone v. Colo. Choice Health Plans.

April 27, 2026

The supreme court held that, although a car rental company may offer its customers supplemental insurance through its own insurer, that arrangement does not impose on the car rental company a nondelegable duty, under either statute or the common law, to act as an insurer. Rather, that duty remains where the law has placed it: with the insurer named on the policy providing the supplemental insurance (i.e., the car rental company’s insurer).

The legislature did not intend to permit the treatment of car rental companies offering supplemental insurance as statutory insurers under title 10 of the Colorado Revised Statutes. Further, while Cary v. United of Omaha Life Insurance Co., 68 P.3d 462 (Colo. 2003), extended the common law duty of good faith and fair dealing beyond insurers—to a narrow class of third-party administrators—that holding lacks enough elasticity to encompass the car rental company in this case. In Cary, this court penned a modest holding, confined to third-party administrators that not only possess a significant financial stake in the resolution of claims but also have primary responsibility over claims handling on behalf of the ultimate insurer; that holding remains narrowly confined. Because the car rental company here was not a third-party administrator, and because claims handling for its insurer has never been its primary responsibility, it did not qualify as a facto insurer under Cary’ s circumscribed holding.