Various personal lines of insurance contain provisions that exclude either family or household members from coverage. The common law that gave rise to these exclusions had to do with the “familial immunity doctrine,” which essentially prohibited legal actions between parents and children, spouses, etc.
While the courts long held this doctrine promoted family harmony, insurance companies were primarily interested in avoiding collusive acts between family members to collect on insurance – a form of fraud.
Since the mid-20th century, family exclusion laws have been challenged on the grounds that courts should recognize the difference between fraud and legitimate claims, and there may well be instances where family members are legitimately liable for negligence resulting in injury to loved ones.
Our Montgomery car accident lawyers know that in Alabama, family household exclusions are generally recognized, though there have been cases that successfully challenged the enforceability of those provisions, whether due to ambiguity or the fact that it runs contrary to state law or public interest.
The recent case of Travelers Commercial Ins. Co. v. Harrington before the Florida Supreme Court reveals how some auto insurance companies continue to have success arguing for enforcement of these provisions.
In Harrington, plaintiff was injured while riding in a vehicle owned by her father, insured by both parents and driven by a non-family member who had permission to operate the vehicle. The car was insured under her parents’ policy and the driver carried his own liability insurance. After successfully filing claims for the policy limits on both those policies, she sought underinsured motorist coverage from her parent’s policy, and also sought to have that coverage stacked.
However, the company denied the claim on grounds that:
- The family vehicle exclusion barred her from obtaining UM coverage.
- Her mother’s selection of non-stacked UM coverage was applicable to plaintiff too, even though she hadn’t personally signed a waiver.
Initially, trial court granted summary judgment to insured, finding the family vehicle exclusions of UM coverage conflicted with Florida law and that in order to enforce a waiver of stacked coverage, the insurer would have had to produce evidence plaintiff personally signed a waiver.
Florida Supreme Court ultimately reversed, finding merit in insurer’s arguments and flatly stating family vehicle exclusions were not against Florida law.
In Alabama, courts have issued conflicting rulings when it comes to exclusions.
Courts in this state have upheld policy provisions within the UM portion that preclude coverage for a vehicle that is regularly used by the insured or which is covered under the liability portion of the same policy.
In the 1997 decision of State Farm Mut. Auto Ins. Co. v. Scott, the state supreme court ruled it was allowable for insurers to exclude UM and UIM coverage until limits of all relevant liability policies have been exhausted.
On the other hand, the court held in 1984 in Gatson v. Integrity Ins. Co. that exclusion of coverage for injuries that occur while riding in vehicles owned by the insured but not covered under the policy are void.
Because policy exclusions and enforcement in auto insurance law can be highly technical, it’s imperative to choose a legal representative with extensive experience.
Call Allred & Allred P.C. at 334.396.9200 to speak with a Montgomery personal injury lawyer.
Travelers Commercial Ins. Co. v. Harrington, Oct. 23, 2014, Florida Supreme Court
More Blog Entries:
Ballesteros v. Roney – Servicemembers Civil Relief Act and Vehicle Accidents, Oct. 20, 2014, Montgomery Car Accident Lawyer Blog