Opinion ID: 2616603
Heading Depth: 1
Heading Rank: 2

Heading: the extent of liability

Text: State Farm urges that if the exclusion is invalid, its invalidity is limited to the statutory minimum required coverage. I agree. In Equity Mutual, supra, a policy exclusion was held invalid to the extent of the minimum statutory coverage. Likewise, in Young v. Mid-Continent, supra, we held that an exclusion was invalid because the statute's intent  require[d] a minimum of protection to any party who is not at party to the contract. (Emphasis Added). Id. at 1088. There is no public policy which requires our interference with the insurance contract between the parties as long as the insurance statutes are complied with. Several states have made the same distinction when considering the extent to which the household clause is invalid. In Farmers Ins. Exch. v. Young, 108 Nev. 328, 331, 832 P.2d 376, 379 (1992), the Nevada Supreme Court held the exclusion invalid only to the extent of statutorily required coverage. The court pointed out that such a holding permitted the innocent victims to recover as intended by the legislature, but also allowed for the insurer to plan for the risks imposed. In Arceneax v. State Farm Mut. Auto. Ins. Co., 113 Ariz. 216, 218, 550 P.2d 87, 89 (1976), the Arizona Supreme Court adopted a similar rule. There, the exclusion was held invalid in light of the public policy evidenced by legislation. However, the court stated [i]t seems logical that the contract of insurance here need provide for members of the household nothing more than the Act requires, and thereafter the exclusionary clause is viable. [7] I find this to be a simple and logical rationale. Rather than interfering with the contractual rights of the insured and insurer beyond what is required by statute, I would confine the household exclusion's invalidity to only that which is required by our compulsory liability insurance laws. This construction of the exclusion is consistent with the policies behind the statutes. Above this limit the parties are free to contract without judicial interference. Where insurance coverage is not mandated the parties are free to contract for insurance to cover such risks, or not, as they see fit. See State Farm v. Greer, 777 P.2d 941, 943 (Okla. 1989); Wiley v. Travelers Ins. Co., 534 P.2d 1293 (Okla. 1974). Apart from the public policy as enunciated by the legislature in its Compulsory Insurance Law there is no reason for the courts to rewrite the contract between the parties. I therefore concur in the Court's opinion and in its judgment to award Plaintiff the statutorily required coverage on each liability policy. I am authorized to state that V.C.J. LAVENDER joins in these views.