Can the undisclosed teenage son of a policy holder be covered under an insurance policy that specifically requires that that policy holder list all member of his household over the age of 14? Read on to find out.
Claims Pointer: The Washington Court of Appeals ruled that the nineteen-year old son of a policy holder was covered under the policy’s UIM endorsement when the language of a policy included the relative of the policy holder but did not explicitly exclude an undisclosed relative over the age of 14. This case highlights the importance of carefully crafting an insurance policy so as to avoid unexpected coverage.
Patriot General Ins. Co. v. Gutierrez, in the Washington Court of Appeals, Division 3, 2015 WL 773571, ___ P.3d ___ (2015).
Jorge Gutierrez applied for an auto insurance policy from Patriot General Insurance Company through an insurance agency with underinsured (UIM) motorist coverage. In filling out his application, Jorge listed himself as the insured and his wife and himself as the authorized drivers. Jorge did not list his son, Javier (age 18) or his daughter, Viviana as part of his household even though he certified on his application that he had listed all of the members of his household over the age of 14. Jorge, a monolingual Spanish-speaker, later testified that he did not understand that he was required to state that he had relatives of driving age in the home because the agent did not make that clear.
During the coverage period of Jorge’s policy, Javier was injured in a rollover accident involving an uninsured driver. Javier, who was still living with his father at the time, tendered an uninsured motorist claim under his father’s policy which Patriot denied on the basis that Javier was not covered by the policy because he did not fit the policy definition of “you.” Patriot then filed an action for declaratory judgment seeking a declaration that Javier was not covered under Jorge’s policy. Javier counterclaimed for coverage, breach of contract, bad faith, and violation of Washington’s Consumer Protection Act. The trial court, applying the statutory definition of “insured,” for purposes of personal injury protection coverage, determined that Javier was covered under the policy. Patriot appealed.
The Washington Court of Appeals first dismissed the trial court’s application of Washington’s casualty statute because the definition the trial court used applied to personal injury protection and was superfluous where Patriot’s policy had a clear definition of “insured.” The court examined the policy in detail. The court first looked to the definition of “you” and “your” in regards to who is covered by the policy, which stated: “You and your also means any relative of that person if they reside in the same household, providing they or their spouse do not own a motor vehicle.” The court then looked at the definition of relative which stated:
“Relative” means a person living in your household related to you by blood, marriage or adoption, including a ward or foster child. Relative includes a minor under your guardianship who lives in your household.
Any relative who is age fourteen (14) or older must be listed on the application or endorsed on the policy prior to a car accident or loss.
The court also looked to the definition of “insured person,” which included “[a]ny other person occupying your insured car with your permission.”
The court first addressed whether the italicized portion above constituted an exclusion to the policy or at least a limitation on the definition of relative. The court stated that the insurer has the burden of drafting exclusions in “clear” and “unequivocal” terms. The court ruled that the requirement to list relatives over the age of fourteen was equivocal because it could be read as an imposition of a duty to cooperation just as much as an exclusion to coverage. The court continued:
“If Patriot General wished to limit the definition of “insured” to achieve the meaning it advances on appeal, it could and should have drafted language that reads: ‘No relative shall be considered an insured person if that person is age fourteen (14) or older and not listed on the application or policy endorsement.’ It did not.”
The court pointed out that the UIM endorsement listed nine coverage exceptions and that the exception Patriot advanced was not one of those.
Patriot also argued that the policy was void because Jorge gave false information when he certified that he did not have any relatives over the age of fourteen. The court rejected that argument because Patriot failed to provide any evidence that Jorge knew of the false statement. The court stated in closing, “In short, Patriot General controlled the language in its auto policy…We will not assist Patriot General in rewriting the policy.”
Case updates are intended to inform our clients and others about legal matters of current interest. They are not intended as legal advice. Readers should not act upon the information contained in this article without seeking professional counsel.