Williams v. GEICO – South Carolina Supreme Court Weighs Crash Case

When a husband and wife were both killed in a horrific crash involving a train, their families were left to pick up the pieces. Unfortunately, that meant they had to battle with the insurance company form which the couple had purchased coverage.
The case of Williams v. GEICO, recently weighed by the South Carolina Supreme Court, involved the grieving family members of both the husband and wife, and the auto insurer, which fought hard to ensure the survivors would get only the bare minimum coverage allowable under state statutes. This was despite the fact that the couple had purchased a policy that allowed for coverage far in excess of that minimum. Thankfully, the court found the provision that allowed this – the family step-down provision – violated public policy, would be injurious to public welfare and was therefore void.

Our Rock Hill car accident lawyers know the statutory minimum amount of auto insurance coverage in this state is $25,000, though at the time this policy was rendered, it was $15,000. That amount often doesn’t even begin to cover expenses for injuries and damages stemming from a serious wreck, most people pay extra for more coverage.

That’s what the couple in this case did. The policy allowed for liability insurance limits of $100,000 per person, $300,000 per accidents involving bodily injury and up to $50,000 per accident for property damage.

The very next day after this policy went into effect, the couple were the sole occupants in a vehicle that was struck by a train. Both died as a result of the impact. The wreckage was so mangled, authorities were unable to determine who had been behind the wheel at the time of the crash. However, both parties were equally insured under the policy, so it didn’t matter who was driving.

A dispute arose as to how much the auto insurance company should pay, per the policy terms. The personal representatives of the pair’s individual estates asserted the proper amount of coverage was $100,000. The insurer, however, insisted it only owed $15,000, per the “exclusions” portion of the policy.

That section of the policy indicated the insurer would not cover anything in excess of minimum limits if the claim was for bodily injury to any insured or relative of an insured residing in the household. This is often referred to as a “family step-down provision” because it reduces coverage for injured family members.

The trial court, following a bench trial, entered a judgment in favor of the insurer, rejecting the family’s argument that the policy was ambiguous. The family appealed, and the case was certified to the South Carolina Supreme Court.

The state high court found that while the language in the policy was not ambiguous, the family step-down provision did run counter to public well-being. While insurers generally have a right to limit liability and impose conditions on their obligations, these terms can not be in contravention to public policy. Freedom of contract is not absolute.

Here, the court agreed the insurer’s attempt to limit or reduce the coverage as listed in the declarations page to its named insureds ran contrary to public policy.

Contact the Carolina injury lawyers at the Lee Law Offices by calling 800-887-1965.

Additional Resources:
Williams v. GEICO, Aug. 20, 2014, South Carolina Supreme Court

More Blog Entries:
Floyd-Tunnell v. Shelter Mut. Ins. Co. – Battling Partial Exclusions in Auto Insurance, Aug. 11, 2014, Rock Hill Car Accident Lawyer Blog

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