Opinion ID: 2445685
Heading Depth: 1
Heading Rank: 5

Heading: Clearwater Exclusion Invalid

Text: Clearwater successfully argued in the Superior Court that the issue was not whether the exclusion was valid, but whether the Clearwater Policy, which it characterized as a commercial policy with a limited scope, was triggered. That characterization is inconsistent with our prior cases that have construed the statutory mandate in section 3902. That section does distinguish between commercial policies and car insurance, but it does not authorize the issuance of a limited policy without UM/UIM coverage. Section 3902 requires that every policy have UM/UIM coverage, unless it is rejected in writing. Our prior cases hold that section 3902 makes UM/UIM coverage mandatory for all vehicles registered in Delaware, unless that coverage is rejected in writing. Castillo did not reject UM/UIM in writing. Where, as here, the insured did not reject UM/UIM, thus making it mandatory, the question becomes whether the General Assembly specifically authorized the exclusion contained in the Clearwater Policy. The policy language at issue in this case is contained in Endorsement Number Four, and reads as follows: The transportation of property by auto for the generation of economic gain or commercial benefit is defined as business property, and such transportation is outside the scope of coverage afforded in this policy. The effect of that language is not materially different from the carrying passengers for a fee exclusion held invalid because the General Assembly did not authorize such an exclusion. [21] In Jeanes v. Nationwide Ins. Co ., [22] the Court of Chancery held that an insurance policy excluding coverage when the insured was carrying passengers for a fee (the insured was injured while driving a DART bus) was invalid because UM coverage is designed to be personal to the insured and not restricted to a certain vehicle. [23] In this case, the General Assembly has not specifically authorized an exclusion for transporting business property. Accordingly we hold that, the exclusion of UM/ UIM insurance coverage from the Clearwater Policy is invalid.