Opinion ID: 2395601
Heading Depth: 1
Heading Rank: 8

Heading: Wagamon and Cubler Any Household Exclusion Invalid

Text: Nationwide acknowledges that Seeman is entitled to have it provide automobile liability insurance coverage, up to the minimum limits required by Delaware's Financial Responsibility Laws, to cover his liability arising out of the injuries suffered by Daniel, a resident of Seeman's household. 21 Del.C. § 2118(a) and 2902(b)(2). Nationwide asserts that [n]o decision of this Court has ever held that a limitation of automobile liability coverage entirely above the statutorily required minimum is void as against public policy. On the contrary, that is precisely what this Court held in Wagamon with regard to a household exclusion. The public policy of this State is to allow the children and spouses of negligent drivers to recover at least to the full extent of the tortfeasor's liability insurance. See Williams v. Williams, Del. Supr., 369 A.2d 669, 673 (1976); and Beattie v. Beattie, Del.Supr., 630 A.2d 1096 (1993). In Wagamon, this Court compared the absolute household exclusion at issue in Wagamon, with the Delaware Financial Responsibility Laws. State Farm Mut. Auto. Ins. Co. v. Wagamon, Del.Supr., 541 A.2d 557, 560 (1988). We concluded that the total household exclusion conflicted with the financial responsibility provisions of 21 Del.C. § 2118(a)(1) and 2902(b)(2). Therefore, we held that [a]ny attempt to restrict this class of protected persons is invalid. Id. at 560. Further, [t]he law admits of no exclusion intended to deny compensation to a portion of the class of victims which the [Financial Responsibility Laws] were designed to protect. Id. This Court has been consistent in its interpretation of Wagamon, as the Superior Court observed when it relied upon our recent statements in Cubler v. State Farm Mut. Ins. Co., Del.Supr., 679 A.2d 66 (1996). In Cubler, we summarized our holdings construing exclusions in automobile liability insurance policies, as follows: This Court has identified three types of exclusions. First are those exclusions which would negate the minimum mandatory statutory liability and no-fault coverages. They are, to that extent at least, unenforceable per se. The second category of exclusions are those which are not both customary as well as consistent with the statute. They are unenforceable to any extent. Hudson v. State Farm Mutual Ins. Co., Del.Supr., 569 A.2d 1168 (1990) (invalidating exclusion for reckless and intentional conduct); Bass v. Horizon Assurance Co., Del.Supr., 562 A.2d 1194 (1989) (invalidating exclusion for driving under the influence); State Farm Mutual Auto. Ins. Co. v. Wagamon, Del.Supr., 541 A.2d 557 (1988) (invalidating exclusion for claims by household members). The third type of exclusions are both customary and consistent with the statutory requirements. They are enforceable beyond the minimum coverage mandated by statute. Harris v. Prudential Property and Casualty Ins. Co., 632 A.2d at 1381; Universal Underwriters Ins. Co. v. The Travelers Ins. Co., 669 A.2d at 48. Id. at 70-71 (certain citations omitted). Nationwide apparently wrote the modified household exclusion at issue in the case sub judice, based upon a misconstruction of this Court's holding in Wagamon and its progeny.