What Triggers An Insured’s Motor Vehicle Exclusion?

Insurance policies provide coverage, which is typically not exhaustive, for certain, specific risks. Insurers may limit their liability and impose conditions on their contractual obligations as long as any such limitation does not conflict with existing law or public policy. Recently, in Theresa Wolfe v. Robert Ross 125 A.3d 408 (2015), a Pennsylvania court held that the motor vehicle exclusion in a homeowner insurance policy excluded coverage for fatalities suffered in a motor vehicle owned by the insured.

What Triggers An Insured's Motor Vehicle Exclusion?This case involved a 19-year-old who consumed alcohol at a graduation party and then took a ride on a dirt bike owned by the homeowner’s son. The boy lost control of the bike and died after colliding with a fixed object. The estate of the deceased sued the homeowner for negligence in providing alcohol to an underage person.

The insurance company refused to defend the claim as it cited the policy’s exclusion which precluded coverage for bodily injury arising out of the use of a motor vehicle owned by the insured.

On appeal, the court framed the issues:

  1. Was the motor vehicle exclusion ambiguous because it did not make clear if the injury must be proximately caused by the vehicle or causally connected with its use, and
  2. Did the trial court err in failing to find the exclusion inapplicable when the victim operated the vehicle and the insured may have negligently provided alcohol to the underage operator of the vehicle?

So what triggers an exclusion? Interpreting insurance contracts requires establishing the intent of the parties, as indicated by the terms of the written policy with ambiguous terms construed in favor of the insured.

The court held that the exclusionary language was not ambiguous based on the case’s facts and this language made clear that the cause of the injury, not the conduct of the insured, prompted the exclusion. The act of the homeowner serving alcohol to minors is separate from the policy language excluding coverage for injuries arising out of the use of a motor vehicle. In this case, the use of the motor vehicle was the proximate cause and the cause in fact of the injury.

Based on the express language of the policy, the court denied the argument that the motor vehicle exclusion only applied when the insured used a motor vehicle and injured another person. The court also denied the argument that the nature of the claim (i.e., negligence) determines whether the exclusion applies. The court held that it was irrelevant that the homeowner allegedly was negligent in providing alcohol to the 19-year old before the accident.

The court then examined public policy and looked at the rationale for excluding certain injuries.   Here, the insurance company was attempting to avoid the higher risks associated with motor vehicles. Since the exclusion did not oppose any existing law or public policy, the court held that the policy excluded coverage of the homeowner for the death of the decedent.

If you or a loved one has suffered any type of injury resulting from any type of accident, contact Powell Law at (570) 961-0777. The consultation is FREE and you don’t pay anything unless we win. Our attorneys, past and present, have represented motor vehicle accident victims for 110 years. Call today!

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