Undisclosed Adult Child Entitled to UIM Coverage

The Washington Court of Appeals recently issued an opinion in Patriot Gen. Ins. Co. v. Gutierrez, No. 32109-6-III, 2015 WL 773571 (Wash. Ct. App. Feb. 24, 2015), addressing whether an insured’s adult child was covered under an auto policy.  The insured failed to disclose the adult child on the insurance application, although the application required the child to be disclosed.  The court determined the adult child was covered because the insurance policy did not expressly exclude the undisclosed relative.

The insured submitted an application for an auto insurance policy requesting underinsured motorist (UIM) coverage.  In the application, the insured listed himself as the insured, and he and his wife as the authorized drivers.  This insured did not list his child, then 18 years old, as part of his household even though the insured certified on his application that he had listed all of the members of his household over the age of 14.

During the coverage period, the insured’s child was a passenger in an underinsured vehicle that was involved in a rollover accident.  The child sustained serious injuries. The child, who was still living with the insured at the time, tendered a UIM claim under his parents’ policy.  The insurance company denied the claim because the son was not an “insured” under the policy.  The insurer cited the fact that the child was an undisclosed relative over the age of 14. The insurance company filed a declaratory judgment action asserting it that the child was not covered under the policy.  The child counterclaimed for breach of contract, bad faith, and violation of the Washington Consumer Protection Act (CPA).  The trial court, applying the statutory definition of “insured,” for purposes of personal injury protection (PIP) coverage, determined that the child was covered under the policy.  The insurance company appealed.

The Washington Court of Appeals first dismissed the trial court’s application of the PIP definition of “insured” because the policy contained a generally applicable definition of the term.  The court found the child met the general definition of an insured.  It then analyzed whether the insured’s failure to list the child resulted in an exclusion for coverage.  The policy did not contain an express exclusion from UIM coverage for undisclosed adult household members.  Noting that the insurer controlled the language of the policy, the court found that the child was a covered insured because the insurer failed to include such an exclusion in the terms of the policy.  The court concluded that it cannot assist the insurer in rewriting the policy and granted the child’s request for UIM coverage.

The attorneys at Maloney Lauersdorf Reiner regularly advise clients regarding denial of insurance benefits, issues of policy interpretation and uninsured/underinsured motorist claims.  Please contact us with any questions about this case or any other matter you see addressed on the MLR Insurance Coverage Blog.

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