South Carolina Supreme Court Rules on Auto Insurance Benefits for Cohabitants

Like a growing number of people across the country, the plaintiff in the case of Bell v. Progressive Direct Insurance cohabited with his fiancee for several years.
Though they never actually set a wedding date, and eventually ended up breaking it off, they had a child together and for a long time shared expenses, property, a vehicle and even car insurance – at least that’s what they thought.

The South Carolina Supreme Court recently reviewed the uninsured motorist claim brought by the fiance after he was injured in a car accident while riding in a vehicle driven by his co-worker. While at its core, our Spartanburg car accident lawyers recognize the case was about whether the plaintiff should be allowed to collect underinsured motorist coverage, more broadly, the justices were weighing whether courts should have greater discretion in interpreting insurance policies by adopting the legal doctrine of reasonable expectations. The state has not historically been one to recognize this theory, instead relying on traditional rules of contract interpretation of insurance policies based on the plain terms.

Based on the most recent ruling, it appears that’s how it will remain.

Prior to the March 2006 crash in question, the plaintiff testified that he had dropped his own auto insurance policy when he and his fiancee first got engaged, shortly after she learned she was pregnant with their son. They were already living together, and soon began sharing a single vehicle. He said it didn’t make sense to pay for two insurance policies, so he canceled his and then subsequently had his name added to her policy.

He assumed this would mean he was fully covered, the same as his fiancee. However, he was only added as a “driver” to her policy for purposes of operating her vehicle. He was not listed as an “insured,” meaning he himself would be covered while in another vehicle.

He was severely injured during the crash, and though he collected insurance benefits from the at-fault party’s insurance, it wasn’t enough to cover his expenses. It was at this point that he sought undersinsured motorist coverage from his fiancee’s provider. However, the claim was denied on the grounds that the claimant wasn’t an insured, and he wasn’t covered under the “spouse” provision of the policy because he and his fiancee weren’t married.

Upon appeal, the plaintiff tried to argue that, first of all, he and his fiancee were engaged in a common-law marriage, meaning he was considered a spouse. The court rejected this argument because the two hadn’t set a date, they were on-again-off again, and by the time the case reached the state supreme court, they had split up for good. They were engaged to be married, the court found, but weren’t engaged in a common-law marriage by legal standards.

In the alternative, the plaintiff had argued that the court should adopt the doctrine of reasonable expectations because the policy was ambiguous with regard to the definition of a “household resident” who could expect coverage. Had the court agreed, it would have meant that South Carolina courts should be given more discretion in interpreting auto insurance policies in general.

However, the state supreme court declined to do this, citing the long history of state courts’ strict interpretation of contractual law – including as it pertains to auto insurance contracts.

That means the petitioner will not be able to collect uninsured motorist benefits.

Unmarried couples who reside together should carefully review the wording of their auto insurance policies to ensure that all parties are adequately covered.

Contact the South Carolina car accident lawyers at the Lee Law Offices by calling 800-887-1965.

Additional Resources:
Bell v. Progressive Direct Insurance, April 9, 2014, South Carolina Supreme Court

More Blog Entries:
Isabella v. Koubek – Workers’ Compensation and Car Accident Injuries, April 6, 2014, Spartanburg Car Accident Lawyer Blog

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