Key Decisions

December 2013 – A Person Must Qualify As An Insured To Get Uninsured Motorist Coverage

(filed under: Key Decisions | December 19, 2013)

A Person Must Qualify As An Insured To Get Uninsured Motorist Coverage

Berendes v. Farmers Insurance Exchange
(Cal. Ct. of App., 3d Dist.), filed November 18, 2013, published November 18, 2013

KEY FACTS

David Duril was driving a car when he hit and killed a pedestrian, Kristina Berendes. She was 39 years old and married to Todd Berendes. They had a daughter named Taylor.

Duril had automobile liability insurance with policy limits of $50,000. His insurer paid its policy limits to settle Todd and Taylor’s claims against Duril.

Because Duril’s policy limits were not adequate to compensate Todd and Taylor for the loss of Kristina, Todd and Taylor made a claim for underinsured motorist benefits under Todd’s own auto policy’s uninsured motorist coverage. Todd’s insurer paid its policy limits because Kristina was an “insured” under his uninsured motorist coverage.

Because Todd and Taylor felt the damages due to Kristina’s death were still worth more than they had received, they made a claim under the uninsured motorist coverage under a Farmers Insurance Exchange automobile insurance policy issued to Kristina’s father, William Felix. Kristina was a driver of one of the cars identified as an insured vehicle on the Farmers’ policy.

The Farmers policy, in accordance with the requirements of the Insurance Code, provided that Farmers would pay sums an insured person was legally entitled to recover from the owner or operator of an uninsured or underinsured motor vehicle. The Insurance Code defined an insured, for purposes of uninsured motorist coverage, as:

“[1] the named insured and [2] the spouse of the named insured and [3], while residents of the same household, relatives of either while occupants of a motor vehicle or otherwise, [4] heirs and any other person while in or upon or entering into or alighting from an insured motor vehicle and [5] any person with respect to damages he or she is entitled to recover for care or loss of services because of bodily injury to which the policy provisions or endorsement apply…”

For at least one year before the accident, Kristina had been living with Todd and Taylor, and not with her father, Felix.

Farmers declined the request for benefits reasoning that just because Kristina was identified as a driver of an insured car, that did not make her an “insured” under its uninsured motorist coverage.

Todd and Taylor sued Farmers for breach of contract and breach of the implied covenant of good faith and fair dealing. The trial court granted Farmers’ summary judgment motion, finding Farmers correctly concluded that Kristina was not an “insured.”

HOLDING & REASONING

The Court of Appeal affirmed. Kristina was not the “named insured,” i.e. Felix. Nor was she his spouse. Nor was she a resident of Felix’s household. Nor was she using an insured vehicle.

Even though Kristina was an “insured” for purposes of other policy coverages, the uninsured motorist coverage had its own definition of “insured,” which did not encompass Kristina. Different definitions of “insured” under different coverages did not make the policy ambiguous.

ANALYSIS

The court confirmed that qualifying for insured status under one part of a policy is not enough to make a person an insured for all purposes. Had Kristina resided in her father’s household, she would have been covered. Had she been using a car listed on her father’s policy, she would have been covered.