Opinion ID: 3013654
Heading Depth: 3
Heading Rank: 1

Heading: 1. which reads, in relevant part,

Text: We will pay all sums the ‘insured’ is legally entitled to recover as damages from the owner or driver of an ‘underinsured motor vehicle.’ The damages must result from ‘bodily injury’ sustained by the ‘insured’ caused by an ‘accident.’ If we were to consider the language of this subparagraph in a vacuum, as suggested by Mrs. Corley, one could construe the endorsement’s promise to pay “all sums” as The sliding descriptions of coverage is: “Any Auto,” “Owned Autos Only,” “Owned Private Passenger Autos Only,” “Owned Autos Other Than Private Passenger Autos Only,” “Owned Autos Subject To No-Fault,” “Owned Autos Subject To A Compulsory Uninsured Motorists Law,” “Specifically Described Autos,” “Hired Autos Only,” and “Nonowned Autos Only.” 5 providing the relief she demands. However, upon considering the endorsement and policy as a whole, as we must, the interpretation suggested by Mrs. Corley becomes untenable. The introduction to the endorsement reads: “For a covered ‘auto’...this endorsement modifies insurance provided under the [] Business Auto Coverage form”(emphasis added). As the District Court found, the plain language of the endorsement modifies the policy with regard to any vehicle covered by the policy. In her brief, Mrs. Corley focuses exclusively on the law governing exemptions of risk from an insurance policy, without indicating why the motorcycle, as an undesignated vehicle, should be included under the policy’s coverage. To construe the endorsement to radically extend, sub silentio, the original vehicle coverage from one 1969 Chevy dump truck to all vehicles acquired by Mrs. Corley’s husband (even if not disclosed to Infinity) defies the clear language of the policy. Finally, we conclude that construing the insurance policy in this fashion does not run afoul of any public policy interest of the Commonwealth of Pennsylvania. In fact, such a construction advances Pennsylvania’s policy of controlling insurance costs. See generally Burnstein v. Prudential Pro. & Cas. Ins. Co., 809 A.2d 204 (Pa. 2002) (rejecting the proposition that underinsured motorist coverage is inherently personal, and hence not portable); see also Prudential Pro. & Cas. Ins. Co. v. Colbert, 813 A.2d 747 (Pa. 2002) (rejecting insurance policy interpretation that would allow “insureds to collect [underinsured motorist] benefits...even if the insureds never disclose any of the other 6 household vehicles to the insurers”); Nationwide Mut. Ins. Co. v. Riley, 352 F.3d 804, 810 (3d. Cir. 2003) (refusing to force an insurance carrier to provide underinsured motorist coverage where the existence of another vehicle was not disclosed by insured). Our decision today to affirm the denial of Mrs. Corley’s claim promotes Pennsylvania’s goal of keeping insurance costs at reasonable levels. To allow Mrs. Corley and insureds like her to recover on insurance claims for vehicles that are not disclosed to an insurer (who then cannot charge the appropriate premiums) would force insuers to increase the cost of insurance for all customers to cover the risk that such cloaked vehicles might one day appear. We recognize that Mrs. Corley has suffered a great deal from this accident. However, for reasons stated above, she may not recover from Infinity. We therefore find that the District Court properly dismissed her claim. Corley Has Waived Her Reasonable Expectation Argument Mrs. Corley also argues on appeal that the doctrine of reasonable expectation supports her claim for relief. However, because this is the first occasion that this argument has been made (despite the many briefs filed with the District Court by both Corley and Infinity), it has been waived. See Gass v. V.I. Telephone Corp., 311 F.3d 237, 246 (3d. Cir. 2002). 7 Even assuming, arguendo, that this argument had not been waived, it cannot revive Mrs. Corley’s claim. “A risk that comes naturally within the terms of a policy is not deemed to be excluded unless the intent of the parties to exclude it appears clearly, so that it cannot be misconstrued.” Couch on Insurance, 22:31 (3d ed. 1998). As we have stated above, the plain language of the insurance policy in question clearly limits coverage to damages arising from the operation of those vehicles specifically described, in this case the 1969 Chevy dump truck. As such, the risk that Mrs. Corley would be injured on another, undisclosed vehicle is not one that could come naturally from the terms of that policy. It would simply have been unreasonable for Mrs. Corley to have believed that, because her husband had purchased underinsured motorist coverage only for his dump truck, she would be covered by that policy for an accident arising from riding as a passenger on his Honda motorcycle, insured under a different policy with a different insurance company. Infinity Has Not Acted In Bad Faith Mrs. Corley also claims that Infinity’s refusal to arbitrate this dispute constitutes bad faith. According to the policy’s arbitration clause, arbitration is not required unless there is a disagreement as to (1) whether the insured is legally entitled to recover damages from an owner of an underinsured vehicle, or (2) the amount of damages. Here, the litigants are disputing neither fault nor amount of damages. Cf. State Farm Mut. Ins. Co. 8 v. Coviello, 233 F.3d 710 , 717 (3d Cir. 2000). What is in dispute is whether Mrs. Corley’s injuries from the motorcycle accident are covered by the dump truck policy. The dispute therefore falls outside of the arbitration clause. As such, the District Court’s dismissal of this claim was proper. We affirm the judgment of the District Court below. 9