The U.S. Court of Appeals for the Eighth Circuit recently rejected a claim by a Missouri woman that an umbrella insurance policy belonging to her daughter and son-in-law covered her other son-in-law, and therefore her, in a crash that occurred in October 2010. In Allstate Indemnity Co. v. Rice, the court held the insurer had no obligation to cover excess liabilities when neither claimant was considered an insured.
Montgomery car accident attorneys recognize that when battling insurance companies for fair compensation, there are a host of legal issues that can arise. This is especially true when those involved might be family members and friends.
In the Rice case, the injured woman was a passenger in a vehicle being driven by her son-in-law. The vehicle belonged to her daughter and another son-in-law. It was a single-vehicle crash, and the woman sustained serious injuries as a result.
At the time of the crash, driver had an auto insurance policy, as did the owners of the vehicle. In addition, the vehicle owners (again, the woman’s daughter and son-in-law) held a personal umbrella insurance policy.
For those not familiar, a personal umbrella insurance policy is intended to protect the insured from major claims and lawsuits, ultimately shielding your assets. While the exact details of an umbrella policy vary, generally they provide additional coverage above the limits of your homeowners’, auto or boat insurance policies. The protection will kick in when the liability on the other policies is exhausted. In some cases, these policies provide coverage for claims that are excluded on most other liability insurance policies (such as false arrest, rental unit coverage, etc.). In cases where the insured is at-fault for a serious crash, such a policy would cover additional costs of medical bills, harm caused by a dog, injuries sustained by a guest at your home due to a fall or injuries to a child who is harmed while playing in your backyard. It would also potentially cover loss of another person’s property, including vehicles.
However, in this case, the owner of the vehicle – the holders of this excess coverage policy – wasn’t at-fault. They were never in the vehicle, and the plaintiff did not file suit against them. (Remember, it’s the woman’s daughter, and she even promised not to pursue litigation.)
The woman was paid $250,000 by her daughter’s auto insurer and another $100,000 by the driver/son-in-law’s insurer, for a total of $350,000.
She then pursued a claim for coverage through her daughter’s umbrella insurance policy. She agreed that whatever award was received (if any) would be reduced by the $350,000 already received.
The issue, however, was whether the driver/son-in-law, the at-fault party in all this, was an “insured” under the terms of the policy, such that the mother-in-law would be entitled to coverage. The policy indicates that insured parties would be the policy holder, any other person named in the declarations, a person related by blood or marriage or adoption who is also a resident household member, any dependent person in the insured’s care who also resides in the household.
The granted summary judgment to the insurer, finding the driver was not an insured, despite the injured woman’s assertion that the driver was an insured because he was considered a “permissive user.”
However, the appellate court held that to make this assertion would go contrary to the terms of the original settlement, which was that she agreed not to hold her daughter or her husband liable for any injuries or damages resulting from the wreck. She further failed to offer a plausible legal theory under which the owners of the vehicle would be legally responsible for the driver’s negligence.
One way in which this case varies from what we might see in Alabama, though, is that Missouri, where this case originates, generally doesn’t impose vicarious liability on a vehicle owner for the actions of a negligent driver. In Alabama, we see this quite often. Still, even if such a such a suit were possible in the Rice case, it would go contrary to the earlier-agreed settlement.
Call Allred & Allred P.C. at 334.396.9200 to speak with a Montgomery personal injury lawyer.
Allstate Indemnity Co. v. Rice, June 17, 2014, U.S. Court of Appeals for the Eighth Circuit
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State Farm v. Gruebele – Teen Driver Insurance Coverage Can Be Tricky, June 11, 2014, Montgomery Car Accident Lawyer Blog