Opinion ID: 1452526
Heading Depth: 2
Heading Rank: 2

Heading: The family member exclusion is void as against public policy.

Text: We thus turn to the dispositive question whether the family member exclusion violates public policy. We hold that it does, and, accordingly, is void. In reaching this conclusion, we are persuaded in large part by the decision of the Supreme Court of Washington in Tissell v. Liberty Mutual Insurance Co., 115 Wash.2d 107, 795 P.2d 126 (1990), which involved a virtually identical issue. Aida Tissell suffered fatal injuries resulting from her husband's negligent operation of the family car. Her guardian made a claim for UIM benefits under the family policy after receiving the policy's maximum liability benefits. The insurer denied UIM coverage, claiming that the policy excluded from the definition of underinsured motor vehicle any vehicle [o]wned by or furnished or available for the regular use of you or any family member unless the covered person was neither operating nor occupying such vehicle at the time of the accident. Id., 795 P.2d at 127. The Tissell Court held that the family member exclusion was void, carefully setting out the public policy rationale for its decision. Id. at 127-28. The Supreme Court of Washington recently reiterated the Tissell rationale in Jain v. State Farm Mutual Automobile Insurance Co., 130 Wash.2d 688, 926 P.2d 923 (1996), and distinguished Millers Casualty Insurance Co. of Texas v. Briggs, 100 Wash.2d 1, 665 P.2d 891 (1983) [5] , reasoning as follows: Millers . . . upheld the validity of clauses excluding the policyholder's car from the definition of underinsured vehicle.... However, the injured party in Millers was not a named insured as in Tissell but rather an unrelated passenger. This difference is critical. The Millers court enunciated three reasons why the exclusion did not violate public policy in the context of an injured person who was neither the policyholder nor a family member but rather an unrelated passenger. The Millers court noted: (1) the injured had paid no premiums to the insurer and upholding the exclusion would not lead to a windfall for the insurance company; (2) unlike uninsured motorist coverage, honoring the exclusion would not leave the injured completely without compensation as he already received liability benefits; and (3) assuming the injured has insurance of his own, he should be able to collect under his own UIM coverage. . . . [T]he first and third legs supporting the Millers decision are not met when the injured is a named insured family member. Indeed, a first party named insured, unlike an unrelated passenger, is deemed to have paid part of the premium. Further, under the third Millers factor, a named insured family member does not have her [or his] own insurance policy from which to obtain her [or his] own UIM coverage because she [or he] was in fact insured as a named insured under the policy in question, and the only source she [or he] has for UIM is under the policy[,] unlike the injured in Millers who, as an unrelated passenger, presumably had his own policy with UIM coverage. This result is consistent with the scope of UIM [coverage] to the extent UIM is meant to place the injured's insurance carrier in the shoes of the underinsured tortfeasor. When the injured is a third party other insured, he [or she] has no UIM coverage with the driver's insurance company. Instead, his [or her] own carrier should step in. However, when the injured is a named insured, her [or his] carrier is obliged to step into the shoes of the insured driver to supplement the coverage. 926 P.2d at 926-27 (citation omitted). We are persuaded, as was the Jain Court, that exclusions that deny dual recovery of both liability and UIM coverage under a single policy to a covered family member offend notions of public policy because the family member will be left without any UIM coverage unless he or she has arranged for separate UIM coverage under a separate policy, a patently unreasonable requirement, particularly with regard to minors. Consequently, we follow the Supreme Court of Washington in declining to uphold any exclusion that permits insurers to deny UIM coverage to family members covered under the policy of a named insured in derogation of the clear legislative intent and public policy in favor of making such coverage available to all under-compensated victims of negligent drivers: The family [] exclusion clause strikes at the heart of [] public policy. This clause prevents a specific class of innocent victims, those persons related to and living with the negligent driver, from receiving financial protection under an insurance policy containing such a clause. In essence, this clause excludes from [UIM] protection an entire class of innocent victim for no good reason.... An exclusion which denies coverage when certain victims are injured is violative of public policy. Tissell, 795 P.2d at 128-29 (Dore, J., en banc) (emphasis omitted) and at 133-34 (Callow, C.J., concurring) (quoting Mutual of Enumclaw Ins. Co. v. Wiscomb, 95 Wash.2d 373, 622 P.2d 1234 (1980), adhered to on rehearing, 97 Wash.2d 203, 643 P.2d 441 (1982)). Accordingly, we hold that the family member exclusion, which attempts to deny UIM coverage to a family member claimant injured by the negligence of another named insured, contravenes public policy and is therefore void.