Court: Connecticut Appellate Court; May 19, 1992; Connecticut; State Appellate Court
An automobile insurer may legally exclude uninsured motorist coverage for a family member living in the insured's household who owns a vehicle not covered by the insured's policy. This conclusion arises from the appeal by James J. Quinn III, who contested a trial court's ruling that vacated an arbitration award in his favor, stating he was not a covered person under the insurance policy. The court affirmed the trial court's judgment.
Key facts include that Quinn was injured in a collision while driving his own car and had previously recovered $20,000 from the tortfeasor. His vehicle had $20,000 in uninsured motorist coverage, while his father’s policy covered five vehicles, each with $20,000 in uninsured motorist coverage. Quinn sought to aggregate these amounts to claim $100,000, but the insurer denied coverage, leading to arbitration. The arbitration panel awarded Quinn $83,333, but the insurer moved to vacate this decision, which the trial court granted.
The appellate court emphasized a de novo review of the arbitration panel's legal interpretation. It noted that if the insurance policy language is clear and unambiguous, it will not be construed against the insurer. Quinn's argument that the policy's definition violates Connecticut law and public policy was also considered, particularly referencing a precedent that favors compensation for victims of uninsured motorists. However, the policy language was deemed plain and not in violation of state law.
Uninsured motorist coverage is mandated by Connecticut law, specifically General Statutes 38a-336 (b) and (d), requiring automobile liability insurance policies to protect insured individuals legally entitled to recover damages. The relevant regulation, 38-175a-6 (a), stipulates that insurers must pay all sums an insured is entitled to recover. The public policy established by case law, including Streitweiser v. Middlesex Mutual Assurance Co., emphasizes that insured individuals should be able to recover damages as if the uninsured motorist had liability insurance. Insurers cannot contractually limit their liability for uninsured or underinsured motorist coverage except as explicitly allowed by regulations. Notably, the regulation does not permit exclusion of household residents who own vehicles from coverage.
In Smith v. Nationwide Mutual Ins. Co., the court upheld policy language that excluded coverage for vehicles owned by family members, ruling that such exclusions do not violate public policy. The court clarified that uninsured motorist coverage is person-oriented, meaning it covers insured individuals regardless of the vehicle they occupy, as long as they are within an insured vehicle or an uninsured vehicle. The outcome of Smith reaffirms that coverage attaches to the insured person, not the vehicle itself, and supports the notion that public policy does not favor restrictions that limit the availability of benefits.
The key distinction between the cases of Harvey and Smith lies in the insured status of the plaintiffs; the plaintiff in Harvey was covered under the relevant policy, while the plaintiff in Smith was not. Consequently, the defendant in this case lacks coverage as he does not qualify as an insured person under the policy definitions, aligning with public policy and legal standards. The father's insurance policy explicitly excludes coverage for relatives residing in his household if they own a vehicle. Public policy, as outlined in General Statutes 38-175c, mandates that uninsured motorist coverage applies strictly to insured individuals in either insured or uninsured vehicles. Although the defendant meets some criteria for coverage as a family member and household resident, his ownership of a car negates his eligibility.
The defendant's assertion that the policy's language acts as an exclusion is rejected; the court clarifies that for a provision to be an exclusion, there must first be coverage established within the policy. The language at issue does not create coverage and thus cannot be exclusionary. The defendant's argument regarding an unfair limitation on stacking insurance is also dismissed, as it assumes he is entitled to stack coverage despite not being covered under the policy in question. The court emphasizes that insurance coverage is tied to the insured individual rather than the vehicle, reaffirming that the defendant does not possess coverage as per the policy terms.
The defendant is not considered a "covered person" under the plaintiff's insurance policy, which precludes him from stacking coverage. The Supreme Court has prohibited aggregation of coverage that leads to unreasonable outcomes, as illustrated by cases where minimal premiums could secure exorbitant coverage amounts. Allowing the defendant to stack coverage would enable numerous household members to claim against each other's policies, undermining both insurer and insured expectations and potentially destabilizing the insurance system. The court affirms the judgment, emphasizing adherence to established precedents against unwarranted stacking expansions. The plaintiff's application named both the defendant and his father, but only the defendant has appealed. The relevant policy defines coverage to include family members residing in the household, but limitations exist regarding uninsured motorist coverage, particularly for vehicles owned by the named insured or their relatives.
Policies issued on or after October 1, 1971, with binding arbitration provisions must include a mechanism for final determination of insurance coverage during arbitration. Claims submitted to arbitration after October 1, 1983, will be handled by a single arbitrator for demands of $40,000 or less, and by a panel of three arbitrators for demands exceeding that amount. Additionally, every policy issued or renewed after July 1, 1984, must provide uninsured motorist coverage for bodily injury and death equal to the liability coverage purchased unless the insured requests a lower amount in writing, adhering to specified minimum limits. This written request will apply to all future renewals and related policies unless modified by the insured.
An insurance company is required to pay its insured up to the uninsured motorist coverage limits after all applicable bodily injury liability policies have been exhausted, but total recovery cannot exceed the limits of the uninsured motorist coverage. An "underinsured motor vehicle" is defined as one where the total liability coverage is less than the limits of the uninsured motorist policy in question. Under the regulations, insurers must pay damages for injuries caused by uninsured motor vehicles, covering all occupants of vehicles with bodily injury liability coverage. An uninsured motor vehicle may include those insured by an insurer that becomes insolvent.
