Excluded Drivers In An Automobile Policy

Insureds in Grand Prairie, Arlington, Fort Worth, Pantego, Dalworthington Gardens, North Richland Hills, Saginaw, Lake Worth, Benbrook, and other places in Tarrant County and Texas need to have some understanding of what an excluded driver is in an automobile insurance policy. An excluded driver is a driver who is not insured under an automobile insurance policy. For some reason the insurance company is refusing to insure the driver. The reasons could vary widely.
A case decided in July, 1993, by the Texarkana Court of Appeals deals with excluded drivers and is worth having an understanding about for future reference. The style of the case is, John DiFrancesco and DSS Partnership d/b/a DS & S Farms v. Houston General Insurance Company. Here is some background.
In July 1990, an automobile accident occurred in which a pickup truck owned by the Partnership and driven by their employee, Thomas V. Avey, was involved. The Partners and Avey were sued for damages by Troy and Nikki Beckham. The Beckhams were allegedly forced off the road and injured by a pickup truck owned by the partnership and operated by Avey. The Partners demanded Houston General defend them which Houston General did, subject to a reservation of rights.
Houston General filed a declaratory judgment action seeking to have the court declare that there was no coverage under the policy due to Avey being an excluded driver under the policy of insurance. The controversy is the result of the parties’ conflicting constructions of a standard exclusion of a named driver endorsement to an automobile liability insurance policy. The policy afforded liability coverage of various automobiles and motor vehicles owned by the Partnership. The endorsement contained this language.
“You agree that none of the insurance coverages afforded by this policy shall apply while Thomas Avey is operating a covered auto or any other motor vehicle. You further agree that this endorsement will also serve as a rejection of uninsured motorists coverage and personal injury protection coverage while a covered auto or any other motor vehicle is operated by the excluded driver.”
There was eventually a trial in the matter where a jury found that Houston General did not owe a defense or indemnity to the Partnership or Avey.
In this case there was a fairly big arguement on the meaning over the word “operating” in the insurance contract. Evidently there was no dispute that Avey did not have permission to be operating the vehicle and the argument by the Beckhams was that Avey should be covered since he was operating the truck as an unauthorized driver. As a result the court got into a discussion of the various definitions of the term operating. The Random House Dictionary of the English Language 1357 (2nd ed. 1987) evidently contained twelve different meanings for the word.
One argument says it is clear that in clause (3) of the policy the word “operated” is employed to describe a relationship between an individual and an automobile. When used in this context the word “operate” means “drive.”
The court said that the endorsement’s purpose is to suspend coverage when a specific person, considered or known to be an unsafe driver, is operating a covered vehicle. It also served the public welfare by tending to keep unsafe drivers off the public highways.
The language employed to state the purpose modifies and defines the word operating in the endorsement to mean the exercise of physical control over a motor vehicle’s usual use, function, and movement; in short, the control of a motor vehicle’s dynamics normally accomplished by a motor vehicle’s driver. Such contextual definition renders the word operating and the endorsement unambiguous. As limited by the context, it has but one meaning. Coverage under the policy is suspended when Thomas Avey drives a covered vehicle, nothing in the language deals with or relates to or limits suspension to authorized use of a vehicle. The conclusions expressed are fortified by the fact that the contextual language conveys no rational message when the word operating is given other of its dictionary or common usage meanings.
This court firmly came down in support of Houston General and the jury that the excuded Driver endorsement clearly limited coverage to situations where Avey was not operating the truck.
This case is an easy call but there are situations where an excluded driver can still get coverage on an insurance policy. For that reason it is vital that an experienced Insurance Law Attorney be consulted.