Auto Insurance Coverage

The terms of coverage for damage to the auto are fairly straightforward: “named-peril” coverage is provided on “covered autos.”  Specifically, the Texas Personal Auto Policy provides that the carrier will pay for “direct and accidental loss to your covered auto.”  The coverage is divided into “collision” coverage and “coverage other than collision.”  The “other than collision” coverage insures against more causes of loss than collision coverage.  If both collision coverage and the “other” peril coverage are purchased then the insured is said to have “comprehensive” coverage.   Different deductibles are charged for each coverage because insureds elect not to carry one of the two available coverages.

The most common type of loss is “accidental loss,” however the definition of “accidental loss” loss is not in most policies.  In 1997, the Austin Court of Appeals issued an opinion in State Farm Mutual Automobile Insurance Co. v. Kelly, which held that an “accidental loss” is a loss that does not ordinarily follow and cannot reasonably be anticipated from the producing act, that is, one that the actor did not intend to produce.  In Kelly when an insured made a good faith purchase of a stolen vehicle and insured it, only to have the police confiscate it and return it to its true owner, such an act is not the natural and probable result of the insured’s good faith purchase.  Accordingly, the loss of the vehicle was “accidental.”  Even though the insured intentionally purchased the vehicle, the ensuing confiscation by the police was unexpected, unanticipated, and unintentional on the insured’s part.  The court went on to say that a stolen vehicle, newly acquired by an insured was a “covered auto” even if the insured did not have good title.  The insured had an insurable interest that was enough to make it a covered auto.

In the 1955, Fort Worth Court of Appeals opinion, Farmers Insurance Exchange v. Wallace, an auto upset by a strong gust of wind while being driven on a public road was an accidental loss.

In the 1985, Amarillo Court of Appeals opinion, Southern Farm Bureau Casualty Insurance Company v. Brock, an intentional act such as an insured’s intentionally ramming his car into another car is not an accidental loss, notwithstanding the insured’s testimony that this act was done to prevent the occupant of another vehicle from shooting someone else.