Policyholders Win Class Certification in Rental Car Coverage Dispute Against Liberty Mutual

On December 2, 2025, the U.S. District Court for the District of Massachusetts issued a significant ruling in the case of Watts v. Liberty Mutual Personal Insurance Co., granting class certification to a group of auto insurance policyholders challenging Liberty Mutual’s rental car coverage practices.

Background

The plaintiffs in the case alleged that Liberty Mutual breached its auto insurance contracts by prematurely terminating rental car benefits following total-loss accidents. Under the policies at issue, Liberty Mutual promised to cover rental car expenses for up to 30 days or for the “period of time reasonably required” to replace the insured vehicle. The plaintiffs claimed that Liberty Mutual applied a uniform practice of ending benefits without making individualized determinations about how long replacement would reasonably take.

Legal Analysis

The court certified the class under Rule 23(b)(3), finding that the case met the requirements of predominance and superiority:

• Predominance: The court concluded that the central legal question—whether Liberty Mutual’s standardized practice violated the terms of its form contracts—was common to all class members and predominated over any individual issues. The judge emphasized that variations in damages or replacement timelines did not undermine the shared legal foundation of the claims.
• Superiority: Given the relatively modest damages at stake for individual policyholders, the court found that a class action was the most efficient and practical method for resolving the dispute.

The court declined to certify the class under Rule 23(b)(2), determining that the plaintiffs’ request for injunctive relief was incidental to their claims for monetary damages and would primarily benefit future policy claimants rather than the current class.

Implications

This ruling represents a meaningful victory for insurance policyholders seeking to challenge uniform claims-handling practices. It underscores the courts’ willingness to certify classes in cases involving standardized insurance contracts and common legal questions, even when individual damages may vary.