Which are the “Permissible” Exclusions inside your Auto Policy?

Which are the “Permissible” Exclusions inside your Auto Policy?

Which are the “Permissible” Exclusions inside your Auto Policy?


Craig P. Goldberg has witnessed nearly every possible circumstance as a result of car accidents. Most cases involve insurance policy issues varying from whether an insurance policy is at effect during the time of the accident to more complicated concepts-like whether roommate A can sue roommate B when hurt like a passenger in roommate B’s vehicle. Among the couple of attorneys who really reads, interprets and understands insurance plans, Mr. Goldberg has observed a rise in “creative” insurance plan language made to exclude coverage for a number of car accidents.

Insurance Code Section 11580.1, subdivision (c), lists the only real allowable exclusions from coverage permitted under California law to have an automobile insurance policy. “Any exclusion not specifically approved by section 11580.1 thus remains impermissible and invalid.” (California Condition Auto. Assn. Inter-Ins. Bureau v. Gong (1984) 162 Cal.Application.3d 518, 528.) (Citation overlooked, emphasis added.) That statute provides:

“[T]he insurance afforded by policy of automobile insurance that subdivision (a) applies, such as the insurer’s obligation to protect, may, by appropriate policy provision, be produced inapplicable to all or any from the following:

(1) Liability assumed by the insured under contract.

(2) Liability for bodily injury or property damage caused intentionally by or at the direction of the insured.

(3) Liability imposed upon or assumed by the insured under any workers’ compensation law.

(4) Liability for bodily injury to any employee of the insured arising out of and in the course of his or her employment.

(5) Liability for bodily injury to an insured or liability for bodily injury to an insured whenever the ultimate benefits of that indemnification accrue directly or indirectly to an insured.

(6) Liability for damage to property owned, rented to, transported by, or in the charge of, an insured. A motor vehicle operated by an insured shall be considered to be property in the charge of an insured.

(7) Liability for any bodily injury or property damage with respect to which insurance is or can be afforded under a nuclear energy liability policy.

(8) Any motor vehicle or class of motor vehicles, as described or designated in the policy, with respect to which coverage is explicitly excluded, in whole or in part.”

Obviously, you will find numerous cases which have defined the level that the eight statutorily approved exclusions control an insurer’s capability to exclude automobile liability. A detailed analysis of individuals cases is past the scope want to know ,. However, a great beginning point for analyzing the propriety associated with a auto exclusion may be the California Top Court situation of Maqui berry farmers Ins. Exchange v. Cocking (1981) 29 Cal.3d 383, 388 (Cocking).

For the reason that Cocking, a legal court rejected generalized reasoning based on “public policy” arguments. Rather, a legal court held that, the general public policy of the condition is contained not in broadly expressed generalized abstractions however in the relevant statutory provisions themselves. Section 11580.05 specifically recites that ‘The Legislature declares the public policy of the condition regarding provisions approved or needed to become incorporated in policies affording automobile insurance or automobile insurance issued or delivered within this condition will be as mentioned in the following paragraphs, [and] this article expresses the entire public policy of the condition respecting the items in such policies, . . .” (Italics added.)

Inside a recent situation, Mercury Insurance Provider tried to enforce its “new” exclusion to prevent having to pay for damages brought on by one roommate to another as a result of a significant car crash. (Mercury Casualty Company v. Chu (Sept. 24, 2014) ___ Cal.Application.fourth____.) The striking facet of this situation is the fact that Mercury really won within the trial court by quarrelling the exclusion was in line with subsection (5) the ultimate benefits accrued directly or not directly for an insured. To include insult, Mercury was suing its very own insured to recuperate about $130,000 in defense costs! Fortunately, the trial court was reversed on appeal.

Mercury tried to support its position by quarrelling it had become against public policy to permit one roommate to file a lawsuit another since there existed a danger of fraud. The California Top Court rejected that argument and held that Mercury’s “new” exclusion was sporadic using the allowable exclusions indexed by 11580.1 which the “public policy” had been based on the statute itself. It wouldn’t accept alternative reasoning to warrant the limitation insurance policy.

Pointless to state, the above mentioned is simply a small illustration of the potential regions of dispute between an insurer as well as an insured more than a policy exclusion. The insurers clearly possess the upper hands in many conditions simply because they have separate dedicated insurance policy lawyers with limitless sources. Most car accident cases involve minor or moderate injuries which frequently don’t justify fighting by having an insurer over coverage. It’s strongly suggested that when a coverage dispute arises or perhaps is even possible, an hurt party or perhaps an insured have to get an attorney which has significant insurance policy expertise.





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