Son who moved out of Kentucky parents’ home not a “resident relative” for underinsured motorist insurance purposes

by Mandy Hicks

Many people think of “car insurance” as something you either have or don’t have. When a claim arises, these folks can be very surprised to learn that there are a multitude of issues outside of parties simply being insured or uninsured.

This is because, at its essence, an insurance policy is a contract that has many different terms, provisions, and exclusions. So it is very important to understand exactly what is – and is not – covered under one’s policy.

As a recent case illustrates, it is also important to discuss your policy with your insurance agent regularly, especially if your household situation changes.

Facts of the Case

In a recent not-to-be-published case arising from the Jefferson Circuit Court entitled Riley v. State Farm Mutual Automobile Insurance Co., the plaintiff was hurt while riding as a passenger in a vehicle that the drunk driver hit head-on in 2012.

The plaintiff first filed a claim against the drunk driver, and that claim was settled. Then the plaintiff sought additional compensation from his parents’ underinsured motorist insurance (UIM) coverage. The UIM policy in question was first purchased in 2007, at which time the plaintiff was still a minor residing with his parents. The parents were the named insureds on the policy, and the plaintiff was listed as a resident relative who regularly operated a vehicle in the household. The declarations page of the insurance policy indicated that the UIM carrier charged an additional premium to include the plaintiff on the policy.

After the 2012 wreck, defendant denied the plaintiff’s claim for UIM benefits on the basis that he was no longer a resident relative because he had moved out of his parent’s home in 2010. The circuit court directed a verdict for the defendant.

Resolution of the Issues

The plaintiff appealed, arguing that he qualified as an insured under the reasonable expectations doctrine. After all, he reasoned, the defendant had accepted an additional premium to cover him under the UIM policy. The defendant responded that the plaintiff was not entitled to coverage because it was undisputed that he was no longer a resident in his parents’ home at the time of the accident giving rise to the claim.

The Commonwealth of Kentucky Court of Appeals

The Court affirmed the trial court’s decision in favor of the defendant. While the plaintiff’s family did pay an additional premium for the plaintiff’s coverage, the Court could not conclude that it was reasonable for them to believe that the plaintiff was covered, irrespective of his residence. According to the court, the policy was clear that UIM coverage for the plaintiff was dependent on his being a resident relative. In so holding, the Court noted, “The doctrine of reasonable expectations does not destroy the insured’s obligation to read the policy, but only holds an insured to a reasonable understanding of that policy.”

The Court also rejected the plaintiff’s argument that there was “illusory coverage” under the circumstances.

Talk to an Attorney About Your Automobile Accident Case

If you need help resolving an automobile collision claim, the experienced car accident attorneys at English, Lucas, Priest & Owsley can assist you in your efforts to recover maximum compensation for your injuries or a loved one’s wrongful death. Call us at (270) 781-6500 and ask for a free consultation to get started on your case. We handle cases throughout both Kentucky and Tennessee, including in Bowling Green, Nashville, Clarksville, Springfield, and Hopkinsville.

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