A court in Florida has made a determination about exactly what the “household exclusion” clause in automobile policies refers to. This is the result of a court case where a car accident occurred that injured the parents of a woman who was driving her grandmother’s vehicle.
This is one of those situations where car insurance gets really confusing. A grandmother named Gilda Menendez owned a vehicle, and had an auto insurance policy. The grandmother let her granddaughter, Fabiola G. Llanes, drive her vehicle.
The granddaughter was driving the vehicle with her parents, Fabiola P. Llanes and Roger Llanes, as passengers, when she got into an accident. The accident left all three people in the vehicle with injuries.
The grandmother had car insurance through State Farm. There is something in her insurance policy called “household exclusion”. This clause states that the insurance will not cover the cost of “any bodily injured” to “any insured or any member of the insured’s family residing in the insured’s household”. At the time of the accident, the granddaughter, Fabiola G. Llanes was living with her parents. Her grandmother, who owned the vehicle, lived by herself.
State Farm said that since the grandmother allowed her granddaughter to drive her vehicle, the granddaughter was, technically, an “insured” driver, (covered by the grandmother’s policy). This meant that State Farm would not cover the cost of treating the injuries sustained by the parents of the granddaughter.
Ms. Menendez and the Llanes family, on the other hand, said that the “household exclusion” clause was written in a way that was ambiguous. The clause didn’t specifically define who the “insured” driver would be.
Since Ms. Menendez was the person named on the insurance policy, and she lived by herself, it was argued that State Farm should provide coverage of the injuries of the granddaughter and her parents. Basically, they insisted that the “household exclusion” clause didn’t apply in this case.
This court case was heard in the Third District Court of Appeals. The court also felt that the “household exclusion” clause was ambiguously worded. Therefore, the court ruled that the policy provision had to be interpreted in favor of the insured person. This meant that State Farm would be required to cover the injuries from the accident.
Next, the case was heard before the Supreme Court, who had a different interpretation. Both State Farm and the grandmother agreed that the granddaughter was a permissive driver under the policy. The policy defined “insured” as both the person whose name was on the policy and as any person who was using the car “within the scope of consent”. Therefore, the court ruled that State Farm doesn’t have to cover the cost of the treatment for the injuries sustained by the parents after all.
Image by Sam Chan on Flickr