Opinion ID: 2616603
Heading Depth: 1
Heading Rank: 8

Heading: The Proper Treatment Of Household Exclusions

Text: Household exclusion clauses should be held invalid only insofar as they would withhold coverage from those who are neither required nor expected to purchase automobile protection  individuals who do not own a car. [78] Recognizing how unlikely it would be for non-owners to maintain UM coverage for personal protection, I would deem it consistent with statutorily articulated public policy to allow these non-owners to recover under another's liability policy, notwithstanding an otherwise applicable household exclusion clause. These clauses should remain effective as to those related household members who own a car. The purpose of liability coverage is to protect other motorists from the insured's negligence, [79] whereas UM coverage protects the insured and any passengers from actionable harm inflicted by other uninsured and underinsured motorists. [80] Although the household exclusion for liability coverage deprives family members of liability protection, it does not prevent individuals from insuring themselves and their families by securing additional UM coverage. Indeed, the statutory regime for UM coverage contemplates insureds' purchase of UM protection at higher limits. Nay, it requires insurance companies, if requested, to offer increased coverage. [81] By affording insureds the freedom to choose the level of protection, we relieve them from having to secure unwanted coverage. Those who desire to invalidate broadly all household exclusion clauses would impose upon the insurer a risk for which the insured did not contract. [82] At first blush, one might think a broad invalidation of all exclusionary clauses would be a victory for consumers. No such benefit can unfortunately be conferred upon the insured public without the tacit concurrent imposition of corresponding costs. Premiums are based upon potential exposure and actuarial soundness. The expanded coverage that would be thrust upon insurers would doubtless be passed on to all affected consumers in the form of higher premiums. [83] IV