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IntraFamily liability exclusions in car insurance policies

James W. Slater
Special to the Legal News

Published: July 18, 2014

One place you don’t want to find surprises is in the language of your auto insurance policy. Most policies are lengthy documents filled with legalese that can be verbose and confusing—with more twists and turns than a first reading of some state statutes. The “intrafamily liability exclusion” is one prime example. It is found in many automobile policies, and is also known as the “family exclusion” and the “household exclusion.”

The “intrafamily exclusion” states that a family member or any person related to an insured by blood, marriage, or adoption, who resides in the same household, may not bring a claim or lawsuit against the named insured family member who may be deemed liable for an accident (if the claimant was a passenger in the “insured vehicle” when the accident occurred).

More simply, Dan is driving his daughter, Mary, and Mary’s friend, Susie, to dance lessons. Dan causes an accident. Susie, a non-relative, will be covered for any injuries, but Mary will not be covered if there is an “intrafamily exclusion” in Dan’s auto insurance policy, unless a wrongful death claim is made.

Some policy language is more expansive and denies coverage even if the injured family member is a pedestrian, or if another vehicle is negligent in the accident. Even more alarming to some insured persons is that if you are denied family member coverage because of the exclusion, the resident household member is usually not entitled to recover under Uninsured/Underinsured Motorist (UM/UIM) provisions in the policy. This person may also be barred from collecting by the courts under interpretation of contract terms (which is the way an insurance policy is generally viewed by the court).

There is light on the horizon. As of March 22, 2013, Ohio Revised Code (ORC), Section 3937.46—entitled ‘owner or operator of motor vehicle in action for wrongful death’—became part of Ohio law and prohibits intrafamily liability exclusions in automobile policies “in a claim or suit for damages made against the owner or operator” under Chapter 2125 of the code which governs wrongful death. According to 3937.46, the prohibition does not apply if: (1) The policy providing the liability coverage in question includes uninsured-underinsured (UM/UIM) motorist coverage pursuant to ORC 3937.18 and (2) Such an intrafamily claim is not precluded by an intrafamily exclusion in the uninsured-underinsured motorist coverage in question.

The origin of the intrafamily restrictions came from the insurance companies’ intent to prevent two insured family members from colluding and attempting to defraud an insurance company. But many insured, especially those who have battled an insurance company on this issue, report it is simply a way to deny coverage and insurance companies have other ways to determine when a claim is fraudulent.

Thus, the injured party can be left without recourse if recovery cannot be made due to an intrafamily exclusion in a policy and the insurer’s policy does not provide coverage under UI/UIM for this type of accident.

How can you protect your family in these types of situations?

You must make certain that your UM/UIM policy does not contain an exclusion for family members when a named insured driver causes an accident and other family members are in the car and are injured. Contact your agent and ask him or her if your policy contains this type of exclusion. If it does, you may need to change carriers in order to find a policy that will protect your family under these circumstances.

This article was written by attorney James W. Slater of the Ohio law firm Slater & Zurz LLP. Slater & Zurz has been representing clients throughout Ohio with all types of legal issues for over 40 years. The law firm has handled over 30,000 personal injury related cases and helped clients receive more than $150,000,000 in verdicts and settlements. For more information, please visit www.slaterzurz.com


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