Woodland Hills Personal Injury Lawyer has an in insurance coverage expertise and sometimes has to explain the seemingly “unexplainable” to accident victims and insurance policyholders. Medical Payments coverage is a great asset which essentially provides “no fault” medical insurance for anyone injured in an insured vehicle up to a stated limit. The cost is minimal and the benefits can be substantial. However, the Medical Payments exclusions sometimes seem to provide illusory coverage.
In a recent unreported Court of Appeal case, Mercury Insurance Company was sued for refusing to provide Med Pay insurance benefits to a Mr. K. Mr. K was injured while driving a car owned by Mr. B. Mr. K lived with Mr. B for 24 years prior to the accident.
The Mercury policy covered Mr. K’s losses only if Mr. B’s car that Mr. K was driving at the time of the accident was an “owned” or “non-owned” automobile as defined in the policy, and it was neither. The real question which Mr. K’s counsel was probably asserting was “If a car is neither ‘owned’ nor ‘non-owned,’ what was it?
Part I of the Mercury policy defines an “Owned Automobile” to include “(a) a motor vehicle listed in the declarations,” and “(c) any private passenger or utility automobile, operable or inoperable, the ownership or lease-hold of which is acquired by the named insured either solely or with a listed resident relative, during the policy period, provided the automobile meets these four conditions: [¶] . . . [¶] (2) the automobile has never been owned by or registered to: . . . a person residing with the named insured . . . .” Because Mr. B and Mr. K had been living together for 24 years, the car was not considered an “Owned Automobile” under the policy as defined in Part I.
Part I of the Mercury policy also defines a “Non-Owned Automobile” to mean “a vehicle that [¶] . . . [¶] (b) is not owned by . . . any other persons listed as drivers in the policy declarations [or] . . . a person residing with an insured . . . .” Since Mr. B owned the car and is listed as a driver on the policy declarations, and lived with Mr. K, the car was not a “non-owned automobile” under the policy as defined in Part I.
Therefore, the Court of Appeal affirmed that the car was neither an “owned” or “non-owned” automobile under the Mercury policy as defined, and thus the policy provided no medical expense coverage for Mr. K’s injuries.
There are lessons in the above fact scenario. First, it is very important to disclose to your insurer all adults living in your residents. This not only impacts coverages like Medical Payments, but liability coverages can also be excluded. This is a more common problem in that often an insured driver will furnish a car for another adults “regular use” without paying an appropriate insurance premium. Further, many policy will simply exclude coverage for adults residing with a named insured which were not disclosed. The insurer has a right to consider how many drivers will be on a particular policy and evaluate things like that driver’s record.
The best course is to consult with an independent insurance agent and allow that agent to procure coverage that will apply in all circumstances.