Who Is Insured Under The Policy

Policy purchasers in Grand Prairie, Arlington, Irving, Fort Worth, Crowley, Hurst, Euless, Bedford, Mansfield, Dallas, and other places in Texas would like to think they know who is covered under a policy they purchase. What is surprising is the difference between what the policy purchaser thinks and what the insurance company thinks.
A 1972, Texas Supreme Court case styled, Robert Snyder, et al. v. Allstate Insurance Company, is an interesting case. Here is a little bit about it.
The controversy is between Allstate, which issued an auto policy to J.B. Rhodes about whether or not they should pay damages arising out of a claim in the possession of and used by Darla Rhodes (minor daughter of J.B.) while being driven by Robert Snyder with Darla Rhodes as a passenger.
Allstate brought this declaratory judgment action seeking an affirmative determination that it had no obligation under its policy.
On June 1, 1968, J.B. purchased a 1962 Mercury auto 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 it is undisputed that J.B. purchased an automobile liability policy from Allstate and that the Mercury was specifically described in the policy and a premium was paid for that car. On January 18, 1969, Darla and Snyder were involved in a collision while Snyder was driving the Auto at Darla’s request. Both suffered personal injuries, as did occupants of the other car.
Snyder and his father, John Snyder, and Darla and her father J.B., had requested Allstate to defend Snyder up to the limits of the Allstate policy.
At a trial in this matter, the trial court withdrew the case from the jury and entered a judgment that Allstate had an obligation to defend Snyder in all actions and to pay all claims up to its policy limits arising out of the collision.
Allstate appealed claiming that by its policy of liability insurance, Allstate contracted with J.B., the named insured, to pay all sums he should become legally obligated to pay as damages because of bodily injury or property damage “arising out of the ownership, maintenance or use of the owned automobile.” The policy defines “insured,” with respect to the owned automobile, as:
“(1) the named insured and any resident of the same household.”
“(2) any other person using such automobile with the permission of the named insured, provided his actual operation or (if he is not operating) his other actual use thereof is within the scope of such permission, and”
“(3) any other person or organization but only with respect to his or its liability because of acts or omissions of an insured under (a)(1) or (2) above,”
“Owned automobile” is defined in the policy as:
“(a) a private passenger, a farm or utility automobile described in this policy for which a specific premium charge indicated that coverage is afforded, …”
It was 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 insureds’ name. As the court pointed out, the policy did not so provide, and the court refused to compel such a requirement.
J.B. testified that he gave Darla the car for her general use and “left it up to her for her own judgment” as to how she used the car, warning not to let “every Tom, Dick, and Harry” to use it. Darla testified that she asked Robert to drive her from Stratford to Fritch because she did not have a jack in her car and did not want to drive alone in the dark. Allstate did not dispute these facts but relied on them in this appeal in making its argument that J.B. had no authority to give his permission as the named insured because he did not own the auto.
This appeals court recognized two fact questions; (1) authority for the permittee (Darla) to allow a third person (Robert) to drive or use the car, and (2) the original permittee’s consent to such use by a third person. As indicated above, these facts were undisputed and thus the court ruled against Allstate.
The cases are often times difficult. Each depends on the facts of exactly what happened and the language in the policy at issue. This is why an experienced Insurance Law Attorney needs to be sought out early in a case where the insurance company denies coverage.

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