Insurance company denied coverage in Kentucky car accident case

by Mandy Hicks

Do you have automobile liability insurance? You probably do. But do you really understand what is covered under your policy, including issues such as exclusions, policy limits, and the definition of an “insured” under the policy? Unfortunately, it is not always clear whether there is insurance coverage for a particular accident.

In the recent case of Shelter Mutual Insurance Company v. Paragh, the Kentucky Court of Appeals reviewed a decision of the Fayette County Circuit Court in a declaratory judgment action between several parties involved in a car accident and an insurance company that had denied coverage of the crash.

Facts of the Case

In October 2010, a 26-year-old man allegedly stopped his vehicle in the center lane of southbound traffic on I-75 near Lexington at around 11 p.m. According to a report made to police by a passing motorist, the man was relieving himself on the roadway beside the car. Before police arrived to investigate the motorist’s complaint, a van rear-ended the man’s vehicle, injuring the van driver and several passengers of the van. The 26-year-old man was the son of the named insured under a personal umbrella policy issued by Shelter insurance company.

Although the umbrella policy covered the personal liability of all family members residing in the policy owner’s household, the insurance company denied coverage for the collision.  The insurance company claimed that the son was not a resident of the household and was thus not insured under the policy.

The driver of the van, her husband, and her passengers filed suit against the son, the insurance company, and others, seeking a declaration of rights concerning whether insurance coverage was available for the accident. Afterward, they amended their complaint to add a claim under Kentucky’s Unfair Claims Settlement Practices Act. The trial court found that the son was a resident of both his father’s household and an apartment within a motel owned and operated by his family at the time of the collision. Although a settlement was entered into by some of the parties, the insurance company appealed the trial court’s order.

The Decision of the Court of Appeals

The appellate court reversed the trial court’s order and remanded the case for further proceedings, holding that the trial court had erred in answering the question of the son’s residency as a matter of law. Instead, the court opined that reasonable minds could differ with respect to the “inferences arising from the abundant and conflicting evidence” pertaining to the son’s residence. The issues of fact surrounding this question therefore precluded summary judgment on the issue.

To Speak to an Experienced Car Accident Attorney

If your family is suffering because of injuries sustained in a truck accident or other motor vehicle collision caused by someone else’s negligence, call English, Lucas, Priest & Owsley at (270) 781-6500 to schedule a free case review. We can help you investigate your case and determine the amount of damages to which you may be entitled, based on your injuries, lost earnings, pain, and other pertinent facts. With offices conveniently located in the Bowling Green area Kentucky, we accept cases throughout Kentucky and Tennessee, including Franklin, Clarksville, and Springfield.

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