Insurance policies can be very difficult to understand – so difficult that even lawyers and judges sometimes disagree about the meanings of certain terms or clauses.
A recent case involving the construction of multiple policies of insurance following an automobile accident illustrates the point.
Facts of the Case
In a recent appellate case considered by the Texas Court of Appeals, the plaintiff was a father who brought suit against the defendant insurance companies, seeking to have the court construe the terms of two insurance policies with regard to an automobile accident in which the plaintiff was driving and his minor child was injured. One of the policies in question was described simply as an “auto policy,” while the other was an umbrella policy. The plaintiff’s minor child was also named as a defendant in the action (by and through his mother/next friend).
The defendant insurance companies asserted a counterclaim for declaratory relief, and each of the parties sought summary judgment. The trial court denied the minor son’s motion, denied in part and granted in part the father’s motion, and denied in part and granted in part the insurance companies’ motion. The parties each appealed the part of the trial court’s order that was adverse to them.
Decision of the Appellate Court
The court of appeals affirmed in part, reversed in part, and rendered the trial court’s judgment in part. They noted that the accident giving rise to the parties’ request for the construction of the insurance policies occurred in 2008 and was the father’s fault. The minor child suffered a severe traumatic brain injury due to the accident. A “family member exclusion” in the auto policy limited liability under the policy to the $25,000 mandated by the Texas Motor Vehicle Safety-Responsibility Act in place at that time; the umbrella policy contained similar language.
In interpreting the policies in question, the court overruled the father’s challenge to the trial court’s determinations that the family exclusion in the auto policy was valid and enforceable, thereby rejecting his arguments that such an exclusion was prohibited by public policy, was unconstitutional, was unconscionable, or was void. The court also rejected the father’s argument with respect to the time that the exclusion was to be applied; according to the court, the exclusion was to be applied at the time of the accident rather than at the time the claim was made. As to the minor child’s appeal, the court found that, under the plain language of the underinsured motorist (UIM) provision of the policy, UIM coverage was not available to pay damages to the minor child caused by the father’s negligence.
As to the insurance company’s cross appeal, the court agreed that the minor child’s status as an “insured” under the umbrella policy was determined at the time of the accident, rather than at the time of the judgment. Accordingly, the court held that the minor child was not entitled to any compensation under the umbrella policy.
Need Help with an East Texas Car Wreck Claim?
An automobile accident can leave an innocent motorist or passenger with many questions. How do I file a claim? How long do I have to bring a lawsuit against the other driver? What is my case worth? East Texas auto accident attorney Earl Drott brings 30 years of experience to the table in each case he accepts. To schedule a free consultation about your case, call us today at 903-531-9300. We are currently reviewing car crash cases throughout the Tyler/Smith County area.
Related Blog Posts: