Can You Recover From A Homeowners’ Insurance Policy After a Georgia Car Accident?

In a recent case, an insurance company filed a declaratory judgment in court for a determination of obligations under a homeowners’ insurance company. The case arose when a girl (Cheyenne Sauls) died as a result of a car accident caused by her drunken friend Jason Lark.
Cheyenne and Jason were socializing at the home of another friend Justin McAllister. There they drank alcohol. Justin gave them the beverages without his father’s knowledge. After midnight Jason and Cheyenne left. Lark was driving. He hit a moving truck that was extending into the road and Cheyenee was thrown out of the car and killed.
At the time, Justin’s father Todd was insured under a Homeowners’ policy. His son was an insured because he was a dependent person under Todd’s care. There was a family liability protection section that agreed to pay damages arising from an occurrence (accident causing bodily injury) to which the policy applied. Coverage would be offered to a person who sustained bodily injury on the insured premises or off the insured premises if the injury was caused by activities of an insured.
However, any injury arising out of motor vehicle use was excluded by the policy. Nonetheless the deceased girl’s parents made a claim against the homeowners’ insurance policy of the drunk driver’s parents. The insurer won a motion for summary judgment. The trial court found the deceased girl’s injuries arose from the use of a car.
The parents of the deceased girl appealed. They argued that their claims weren’t based on the use of the car, which was excluded, but the parent’s actions in giving alcoholic beverages to the driver and to the decedent. They further argued that but for the McAllister’s actions in giving their daughter and her friend alcohol, their daughter would not have died. They also argued her presence in the car was incidental to underlying liability of the defendants for putting her in peril.
The appellate court explained an insurance company may fix the policy terms as it wishes so long as they aren’t contrary to law. The court explained that McAllister insured himself, relatives and dependents from having to pay damages they might become legally responsible to pay. He did not, however, insure against damages they might become legally obligated to pay because of bodily injury from car accident.
The court explained that if the phrase “arising out of” is found in an exclusionary clause, a “but for” test is applied. The issue here was whether, but for use of a motor vehicle there could be no claim against the insured. The claims against the McAllisters would not exist, but for the friend’s use of the car.
The court noted that the motor vehicle exclusion didn’t specify whether coverage was excluded for bodily injury arising from use of a vehicle by anybody, or just bodily injury arising from use of a vehicle by the insured.
The parents argued that it was reasonable for the holder of a homeowners’ policy to expect the auto exclusion only precluded coverage for personal injuries arising out of the insured’ use of a car. The court disagreed stating that if that were the intent, the auto exclusion would include the phrase “by an insured.” It affirmed the lower court.
If you are hurt or a loved one is killed due to negligence, you may be able to recover compensation for your losses. Experienced Atlanta personal injury attorney Terrence R. Bethune can evaluate your case and fight for any compensation you may deserve. Contact us at 404-875-7800 or via our online form.
More Blog Posts
What is an Ante-Litem Notice in Georgia? February 28, 2014
Proximate Cause in Georgia Car Accidents, February 13, 2014
Tandem Driving Theory of Liability in Georgia Car Accidents, February 4, 2014

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