When it comes to uninsured/underinsured motorist (UM) coverage, almost all auto insurance policies limit coverage to resident family members. That means that in order for someone other than the policyholder to stake a claim to coverage, he or she must be family member (by blood, marriage, adoption, etc.) and must also reside in the same household.
These may seem like relatively straightforward criteria, but they have proved to be sticking points in a number of car accident lawsuits. The case of North Carolina Farm Bureau Mutual Insurance Company, Inc. v. Paschal et al. heard by the North Carolina Court of Appeals earlier this year is one example.
UM coverage is allowable for situations where the at-fault driver either doesn’t have insurance or the insurance policy liability limits do not cover the full extent of damages suffered by injured party.
Our Greensboro accident lawyers know that rarely do insurers pay these policy limits without a fight. We are dedicated to ensuring our clients have the kind of quality legal representation that will allow them to go toe-to-toe with deep-pocketed insurers.
In the Paschal case, the question was whether a 15-year-old girl who lived on her grandfather’s “family farm,” but technically in a different house at the time of the crash was covered under her grandfather’s UM policy following a serious crash. Although trial court granted summary judgment to plaintiff insurer (which filed action seeking declaratory judgment on the issue of coverage), the appellate court reversed in favor of the girl and her family.
The court noted the reversal came only after careful review of the very specific facts of this case, and the ruling likely won’t affect other claims to any broad degree.
According to court records, the 16-year-old girl was seriously injured in 2009 as a passenger in a truck driven by her cousin, who ran off the road into a ditch. She was ejected form the vehicle.
Her cousin’s insurance policy tendered $30,000 to cover her damages, but her medical bills alone tallied more than $81,000. Through her guardian ad litem, a complaint was filed requesting UM coverage through her paternal grandfather’s UM insurance policy. The insurer then filed a complaint for declaratory judgment, asking the court to rule the girl was not covered under the policy, as the girl, while a relative, was not a resident of the same household as her grandfather. The pair resided in different houses, though both were located on the same large farm owned by her grandfather. At various times throughout her child, she had resided with her grandfather, as her mother was uninvolved and her father was in and out of prison.
Although trial court granted this request, the appellate court’s reversal was based on the following facts:
- Although grandfather and granddaughter slept at different residences, grandfather owned the house where granddaughter resided and visited there nearly every day.
- Grandfather paid all expenses for that household and for granddaughter’s daily necessities (food, clothing, etc.).
- Grandfather took her doctor and dentist appointments and covered all related expenses.
- Grandfather owned several properties on the farm, had keys to all of them (where other family members resided) and visited them all regularly.
- Grandfather testified that the girl, her father and her brothers were all part of his household.
In reversing the trial court, appellate panel cited the 1985 case of Davis v. Maryland Casualty Co., in which the court found the term “resident” is somewhat flexible and ambiguous. Further, for purposes of insurance coverage, a minor could be found a resident of more than one household.
This is instructive particularly in cases where children may reside at times or partially not only with grandparents, but also with different parents.
Contact the North Carolina injury lawyers at the Lee Law Offices by calling 800-887-1965.
North Carolina Farm Bureau Mutual Insurance Company, Inc. v. Paschal et al., Jan. 7, 2014, North Carolina Court of Appeals
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As NC Senate Candidate Urges Tort Reform, A 1978 Lawsuit Resurfaces, Oct. 29, 2014, Greensboro Car Accident Lawyer Blog