We all know there are drivers who take their chances behind the wheel without insurance.
In some cases, these individuals may be “excluded” drivers, or those who have been expressly named as not being listed on a household member’s policy. People or insurance companies will list individuals as excluded for a host of reasons, ranging from a spouse who has a bad driving record to a teen whose presence on the policy would cause rates to spike.
Our Charlotte car accident attorneys know that auto insurance firms love these policies because it minimizes their risk. In theory, anyone you allow to drive your vehicle is considered a “permissive user” of that vehicle and as such, will be covered under the vehicle policy. However, if a vehicle owner allows an excluded driver to operate the vehicle and he or she is subsequently involved in a crash, the insurance company may be indemnified and both the driver and the car owner may be held personally liable.
You can bet that insurance companies will fight to ensure this exclusion is enforced. But as the case of Lyons v. Direct General Insurance Company of Mississippi shows, a good personal injury lawyer can make a difference.
In this case, the plaintiff was a passenger in a vehicle driven by a friend, who lost control of the car and slammed into a tree. The plaintiff suffered serious injuries as a result of this single-car crash, and sued, ultimately winning a $72,500 judgment against the driver.
The vehicle in question belonged to the driver’s mother, and under her insurance policy, her son was expressly excluded from coverage. As a result, the insurance company denied its responsibility to pay for the judgment.
The victim then sought a declaratory judgment from the court, asking for a ruling that would compel the insurance company to pay. The plaintiff acknowledge that the driver was excluded from the insurance policy, but argued that state law requires minimum liability coverage for all permissive drivers. Plus, the policy holder’s insurance card made no mention of permissive driver exclusions.
The circuit court instead granted a summary judgment to the defendant, finding the policy clearly and specifically included the son as a driver.
The victim appealed, and the Mississippi Court of Appeals reversed, finding that state law does require minimum liability for all permissive users – regardless of exclusions. The insurance company appealed, but the Mississippi Supreme court affirmed the appellate court ruling.
There are some states that severely limit auto insurance policy exclusions. North Carolina is not one of them.
In fact, the 2011 North Carolina case of State Farm Mut. Auto. Ins. Co. v. Bustos-Ramirez ruled in favor of an insurance company that was able to show the driver of an insured vehicle, while not specifically listed as excluded, had been told by the policy owner not to drive the vehicle while drinking. He then took the vehicle out without permission, consumed alcohol, got behind the wheel, crashed the car and killed a passenger. The Court of Appeals ruled that the company was justified in denying coverage based on its “reasonable belief exclusion,” which held that liability coverage would not be provided to anyone operating the vehicle where he or she did not have a reasonable belief that he or she was entitled to do so.
The North Carolina Financial Responsibility Act holds that auto insurance companies have to cover anyone who is in lawful possession of a vehicle at the time of a crash.
Contact our North Carolina personal injury lawyers at Lee Law Offices today by calling 800-887-1965.
Lyons v. Direct General Insurance Company of Mississippi, February 2014, Mississippi Supreme Court
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NTSB Report Highlights Dangers of Wrong-Way Collisions, Jan. 6, 2014, Charlotte Car Accident Lawyer Blog