Opinion ID: 1658184
Heading Depth: 3
Heading Rank: 2

Heading: Ambiguities Construed in Favor of Insured

Text: Hooper held an insurer may not escape liability by taking advantage of an ambiguity. This rule raises the question most vigorously argued by the parties in the instant cases, i.e., was there an ambiguity so that the policy must be construed in favor of the claimant? Instant claimants contend that in the plain English of the policy, the accident, they as persons, and the automobiles they drove were covered. Insurers contend the automobiles driven were not covered. Having in mind the policy as set out ante, pp 617-618 except as hereinafter stated, let us review whether or not there was an ambiguity. We first look to see whether the injury is of the type covered. The excerpt Coverage A  Bodily Injury Liability, ante, pp 617-618 covers the injuries in question without doubt. We next look to see who is insured. Since this is the principal issue here, we reproduce the pertinent text quoted ante, p 617: Persons Insured: The following are insureds under Part I:
(1) the named insured and any resident of the same household,

Reading Persons Insured leads to the clear conclusion the claimants here are provided liability coverage. The claimants are either the named policyholder or resident relatives of the policyholder, so with respect to both categories  owned automobile and nonowned automobile  they are covered. Since the terms owned automobile and nonowned automobile are terms in common use with unambiguous meanings, claimants argue that there is no reason to look any further. Moreover, claimants contend that if a supercautious policy reader wanted to make certain there was no pertinent exclusion from coverage, the reader could look at the section on exclusions. Examination of that section would reveal no exclusion that is pertinent to the facts in question. So examination of accident coverage, persons insured and exclusions, claimants contend, indicates that there should be entitlement to liability coverage. The insurers contend that there is indeed an exclusion from coverage. They say that there is a third category of automobiles in addition to owned automobiles and nonowned automobiles. The insurers explain this paradox by saying that when their policies use the common term nonowned automobile, it has a special meaning for purposes of the policies that requires a policyholder to look beyond the clear and common understanding of the term to the policies' definitions section. There nonowned automobile is defined as follows: [N]on-owned automobile means an automobile or trailer not owned by or furnished for the regular use of either the named insured or any relative.... One must also consult the definition of relative to see that it means a relative who is a resident of the same household as the named insured. The pieces, as contended by the insurer, are all there and can be put together, if you are an expert specially experienced in these matters. The question to be decided remains. Are there two constructions, so that the insured's construction must prevail? It would fairly appear that there is here a real ambiguity, and consequently the claimants' construction should prevail. In any event, it is instructive to refer to the policy in the Hooper case, which contained this exclusion: This provision shall not cover homicide or death resulting directly or indirectly from ..., followed by twelve specified modifiers as set out ante, p 621. The ambiguity in that case concerned whether the modifiers applied to both homicide and death or just to the latter. The modifiers included some conditions which would appear to have reference only to death and not to homicide, for example: resulting directly or indirectly from ... travel, or flight in any aircraft or balloon; participation in submarine operations; and hemophilia. It certainly was arguable by the insurer, as in the instant cases, that the nature of the modifiers made only the insurer's construction reasonable, i.e., the modifiers applied only to death but not to homicide. However, this Court held oppositely and denied the exclusion. The instant cases certainly present greater ambiguity than in Hooper. Therefore, it is reasonable for this Court to invalidate the owned-automobile exclusion in these cases.