Automobile Coverage

Dallas insurance lawyers and those in Mesquite, Garland, Richardson, Irving, and others areas in the metroplex need to be aware of this case.
The Texas Supreme Court issued an opinion in 1972, that is still good law. The style of the case is, Snyder v. Allstate Insurance Company. Here is some relevant information.
The controversy here is between Allstate, which issued an automobile insurance policy to J.B. Rhodes, and Fidelity and Casualty Company, which issued a policy to John Snyder, as to which insurer was obligated to defend Robert Snyder (minor son of John Snyder) and pay damages arising out of the collision of an automobile in the possession of and used by Darla Rhodes (minor daughter of J.B. Rhodes) while being driven by Robert Snyder with Darla Rhodes as a passenger.
Allstate Insurance Company brought this declaratory judgment action seeking an affirmative determination that it has no obligation under its policy. Fidelity contended that Allstate had primary coverage and that Fidelity’s liability is limited to excess coverage under John Snyder’s policy.
On June 1, 1968, J.B. Rhodes purchased a 1962 Mercury automobile and delivered it to his daughter, Darla, a minor, who did not live in the same household with her father. Both the legal and equitable title to the car are disputed by the parties, but is is undisputed that J.B. purchased an automobile liability insurance policy from Allstate and that the 1962 Mercury was specifically described in the policy and a premium was paid for that car. On January 18, 1969, Darla and Robert Snyder were involved in a collision while Snyder was driving the automobile at Darla’s request. Both suffered personal injuries, as did the occupants of the other car, who have suits pending against Robert for damages to person and property as a result of the collision.
Robert and his father, John Snyder, and Darla and her father, J.B. Rhodes, have requested Allstate to defend Robert up to the limits of the Allstate policy against any suits arising out of the collision.
Allstate sought a judgment decreeing that Allstate has no obligation to defend Robert Snyder or pay any claim against him arising out of the collision in question, or in the alternative, that both Allstate and Fidelity are obligated to Darla Rhodes and Robert Snyder “pro rata–in keeping with their policy limits.”
Both policies have “other insurance” clauses which state that the policy provides only excess insurance with respect to non-owned automobiles, but provide for prorated coverage with respect to the owned automobile. If the 1962 Mercury was an “owned automobile” within the meaning of the Allstate policy, then Allstate’s coverage is primary and Fidelity “non-owned” coverage is excess within the meaning of both policies.
It is undisputed that a specific premium charge was paid on the specific automobile in question; therefore, the automobile was an “owned automobile.” Allstate argued that in addition to the definition of “owned automobile” the policy required that actual ownership of the automobile be in the named insured. The policy does not so provide, and this court found no rule of law which would compel it to add such requirement.
Since the ownership of the vehicle is clear, this court ruled against Allstate.
This case serves as an example of how an insurance company will use policy language to deny claims that they should be paying.

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