Opinion ID: 2636721
Heading Depth: 1
Heading Rank: 3

Heading: the loaned vehicle exclusion contravenes the public policy behind the compulsory liability insurance law to the extent it denies to an injured third party the minimum amount of liability insurance required by statute [16]

Text: ¶ 11 The provisions of 47 O.S.2001 § 7-601(C)(1) prohibit the operation of any motor vehicle in this state unless it is insured or secured for the payment of personal injury or property damage to another arising out of the ownership, maintenance, operation or use of the vehicle. [17] As part of this mandate, the law requires that every owner's policy of automobile liability insurance include an omnibus clause that insures against liability not only the named insured, but also any other person using an insured vehicle with the express or implied permission of the named insured. [18] No one may be excluded from liability coverage unless the exclusion is authorized by existing laws. [19] ¶ 12 The principal purpose of compulsory liability insurance is to protect the public from the financial hardship that may result from the use of automobiles by people who are financially unable to respond in damages for any injury done. [20] In enacting legislation compelling the purchase of liability insurance, the legislature intended that every vehicle operated in this state be secured against liability to innocent victims of the negligent operation of insured vehicles. [21] This clearly articulated public policy plainly overrides contrary private agreements that restrict coverage whenever the contractual strictures do not square with the purpose of the Compulsory Liability Insurance Law. [22] In light of this public policy, clauses which would exclude from coverage all potential claimants have been almost uniformly invalidated because they are at odds with the legislative intent of the Compulsory Liability Insurance Law. [23] Our decisions make clear that an insured vehicle cannot be rendered uninsured vis a vis the general public. [24] ¶ 13 The Loaned Vehicle Exclusion is not authorized by the Compulsory Liability Insurance Law and does not differ in any significant respect from other exclusions deemed incompatible with the statute because they would bar from coverage all potential claimants. The Loaned Vehicle Exclusion removes protection from the general public by rendering uninsured an otherwise insured vehicle when a certain class of people, customers of a named-insured dealership or repair shop, happen to be driving that vehicle. Because the Loaned Vehicle Exclusion has the effect of withholding coverage from the general public and is not sanctioned by existing law, we pronounce it violative of the public policy embodied in 47 O.S.2001 § 7-601(C)(1). ¶ 14 The legislatively-declared imperative behind the Compulsory Liability Insurance Law is that a minimum amount of liability insurance be available for the protection of the general public. [25] In furtherance of that policy, we declare that the Law bars enforcement of the Loaned Vehicle Exclusion up to the statutorily-mandated minimum amount of liability coverage. Liability coverage in excess of the statutory minimum is controlled by the parties' agreement.