Wednesday, January 5, 2005
Fourth District C.A. Says Insurers Cannot Exclude Motorcycles From Uninsured Motorist Coverage
By a MetNews Staff Writer
A provision in an auto insurance policy, excluding uninsured and underinsured motorist coverage for an accident that occurs when the insured is operating a motor vehicle with less than four wheels, violates state law, the Fourth District Court of Appeal ruled yesterday.
“We conclude this exclusion contravenes public policy because it impermissibly narrows the scope of UM and UIM coverage and we therefore reverse the judgment in favor of the insurer,” Justice James A. McIntyre wrote for Div. One.
The court reinstated an action by Robert W. Daun, a San Diego police officer seeking recovery under the underinsured motorist provision of his personal auto policy with USAA Casualty Insurance Company. Daun’s police motorcycle was involved in an accident with a driver whose carrier paid policy limits of $15,000; Daun’s USAA policy had UM and UIM limits of $30,000 but purported to exclude coverage where “you or any family member is the operator of any self-propelled vehicle with less than four wheels that is not insured for this coverage under this policy.”
San Diego Superior Court Judge Charles R. Hayes concluded there was no coverage under the policy and dismissed Daun’s suit for violation of the Unfair Competition Law.
But McIntyre said the exclusion violates Insurance Code Sec. 11580.2, which mandates that all motor vehicle policies written in the state include UM and UIM coverage unless waived by both the insured and insurer in writing and in the manner specified by the code section. Otherwise, there are eight specified situations in which coverage may be excluded.
The statute has been interpreted as incorporating coverage in at least the mandatory minimum amount into any policy as to which there is no waiver or an insufficient waiver, the justice explained.
None of the statutory exemptions appear to apply in Daun’s case, McIntyre wrote.
An exception for injuries suffered by an occupant of a vehicle owned by the insured but not covered by the policy does not apply, the jurist reasoned, since the city, not Daun, owned the motorcycle. Nor does the exception for injuries suffered by an insured “while entering into or alighting from a motor vehicle other than the described motor vehicle if the owner thereof has insurance similar to that provided in this section” apply, the justice wrote, because the motorcycle was self-insured by the city.
While an insurer may exclude coverage for a “class of motor vehicles” from the liability portion of its policy, McIntyre went on to say, no such exclusion is permitted from UM and UIM coverage under Sec. 11580.2.
“In summary, section 11580.2 mandates UM and UIM coverage to the named insured regardless of whether the individual is in a motor vehicle or on a horse, motorcycle, bicycle or stilts when injured by an uninsured or underinsured motorist, so long as one of the statutory exclusions does not apply,” the justice elaborated. “...The fact Daun was in a non-owned motor vehicle at the time of the accident and not in the insured motor vehicle does not vitiate coverage where none of the statutory exclusions apply.”
The case is Daun v. USAA Casualty Insurance Company, 05 S.O.S. 40.
Copyright 2005, Metropolitan News Company