Opinion ID: 2167753
Heading Depth: 1
Heading Rank: 2

Heading: Question 2: Is a Household Exclusion Clause Contrary to Indiana Public Policy?

Text: Boles made clear that, prior to the enactment of § 9-1-4-3.5, a household exclusion clause in an automobile insurance policy was not contrary to the public policy of Indiana. We stated there: We fail to see in what sense the household exclusion clause contravenes public policy implicit in Ind. Code § 9-2-1-1 et seq., when the Act only requires liability insurance for injuries sustained by persons other than the insured and when the Act does not mandate insurance be the means of proving financial responsibility. 481 N.E.2d at 1101. Since at least 1977, our courts have made clear that household exclusion clauses will be read to be consistent with the public policy of Indiana. See, e.g., United Farm Bureau Mut. Ins. Co. v. Hanley (1977), 172 Ind. App. 329, 360 N.E.2d 247; Boles, 481 N.E.2d at 1101. Hanley expressly invited the legislature to make clear any intentions to the contrary by explicitly nullifying household exclusion clauses. 172 Ind. App. at 341; 360 N.E.2d at 254. Thirteen years later, after Boles and after at least four revisions of § 9-1-4-3.5, the legislature still has in no way expressed any intent to void household exclusion clauses. As we noted above, the principle effect of § 9-1-4-3.5 has been to reduce drastically the possibility of uncompensated first accidents by drivers. Indiana is now a compulsory financial responsibility state such that drivers and their families are protected financially from the damage which can be inflicted on them by other motorists. While § 9-1-4-3.5 represented a considerable improvement in the implementation of this policy, we see little to suggest that the legislature desired to compel parents, for example, to buy liability insurance to cover damage actions brought by their own children. The decision in Boles, therefore, remains dispositive in its assertion that household exclusion clauses comport with Indiana public policy. Because the exclusion clause does not contravene public policy, courts should respect the validity of the agreement between the parties and give effect to the exclusion. Gelco, 539 N.E.2d at 981; Boles, 481 N.E.2d at 1101. In short, though Indiana is now a compulsory financial responsibility state, household exclusion clauses do not violate the policy of the state. GIVAN and PIVARNIK, JJ., concur. DeBRULER and DICKSON, JJ., dissent without opinion.