As one might expect, a large number of motor vehicle and motorcycle accident cases focus on the issues of who was at fault and how much money it will take to fully compensate the injured person (or deceased person’s family) for the damages suffered in the collision.
Sometimes, however, the issue is not who is at fault but instead whether a particular insurance company is obligated to pay a claim arising from the accident. Such was the case in a recent declaratory judgment action that was reviewed by the Tennessee appellate court.
Facts of the Case
In the recent case of Tennessee Farmers Mutual Insurance Company v. Estate of Archie, an insurance company filed a declaratory judgment action against a woman who was seriously injured in a one-vehicle motorcycle accident that occurred when the cyclist (who was an insured under a liability insurance policy issued by the insurance company) struck a pothole and lost control of the motorcycle. The insurance company argued that it was not obligated to defend or pay damages resulting from a negligence action filed by the woman against the cyclist’s estate (he died in the wreck) because of a so-called “household exclusion” provision of the cyclist’s policy. Under that provision, there was no coverage for a bodily injury to “any person residing in the covered person’s household.”
Following a bench trial, the lower court decided that the exclusion did not apply because the woman was not residing in the cyclist’s house when the crash occurred. The insurance company appealed.
Decision of the Court of Appeals of Tennessee
The appellate court affirmed. The court first observed that parties to an insurance contract are free to make any agreement they choose regarding coverage as long as that agreement is within the bounds of the law and public policy. In construing an insurance policy, the court’s job is to give effect to the parties’ intent by looking at the plain language of the contract and giving the words therein their usual and ordinary meaning.
With regard to the exclusion for “any person residing in the covered person’s household,” the court noted that the purpose of such language is to prevent collusion by relieving an insurance company of claims from those who, due to close family ties, would be “naturally partial” in case of injury.
Here, although the injured woman was renting a room in the cyclist’s house at the time of the accident, the two were not romantically linked, and the arrangement was just until the woman was more financially stable. The woman did not receive mail at the house, kept her furniture other than a bed in storage, and spent many nights at her boyfriend’s residence. The court determined that this arrangement was made as a matter of economic expediency rather than in a “family” sense. Hence, the exclusion did not apply, and the insurance company was obligated to defend the woman’s negligence claim against the cyclist and pay damages if she was successful in that endeavor.
Get Quality Legal Assistance with Your Tennessee Accident Case
Regardless of whether a car accident case revolves around who was at fault or which insurance company should pay for the injured party’s medical expenses, lost wages, and pain and suffering, it is always a good idea to talk to a lawyer as soon as possible after a truck, car, or motorcycle accident. The friendly and helpful Tennessee car accident attorneys at English, Lucas, Priest & Owsley, LLP, offer a free, no-obligation case consultation. To schedule an appointment in our Bowling Green offices to discuss your Tennessee or Kentucky accident case, call us today at (270) 781-6500.
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