Personal Injury Insurance Coverage

Brien Roche

Insurance policies tend to follow certain basic formats. The first part is the insurance agreement. Within the insurance agreement there is a definition as to who and what is covered.

Next comes the definitions.

Next may come certain exclusions. Exclusions are what is not covered. Next there may be a limits of liability clause that contains language as far as stacking and pro rata payments. Also this may be joined with what is called an “other insurance clause”. The other insurance clause deals with what the company will pay if the insured is covered under more than one insurance policy that covers the particular loss in question.

The face page of any policy is what is called the “declaration page”. In other words the declaration page is a declaration by the insurance company as to who the named insured is and what the limits of liability are.

Personal Injury Insurance Coverage-General Rules of Construction

In addition there are some basic principles as to how insurance policies are interpreted. However in many cases there may be state statutes that govern what the terms of the insurance are to be. There may also be certain administrative regulations passed by the Bureau of Insurance that govern this. To the extent that there is any conflict between what the policy says and what the statute or the regulations say, then the latter controls. State Farm v. Manojlovic, 215 Va. 382 (1974)

In addition there may be ambiguity in a policy. Ambiguity means that the reasonable reading of the policy may lead to two opposite interpretations. Ambiguity is construed against the carrier. Granite State Insurance v. Bottoms, 243 Va. 228 (1992)

Furthermore if the statute or regulation that governs the terms of coverage is remedial, then the statute/regulation will be interpreted liberally to provide coverage. USAA v. Alexander, 248 Va. 185 (1994) The statute or regulation is remedial if it is enacted for the benefit of the party to be protected.

State-Issued Forms

In Virginia, the Bureau of Insurance promulgates certain forms for insurance policies. It’s important to look at those forms. However in litigation with an insurance company, they may try to rely upon the form as being their defense to a coverage issue. That is, their position may be that they simply use the state-issued form. Therefore how can they be criticized. However these standard forms are issued by the Insurance Services Office which is an arm of the insurance industry.

In Levine v. Employers Insurance of Wausau, 887 F.3d 623 (4th Cir., 2018), the court noted that the endorsement was a standard form promulgated by the State Corporation Commission. Therefore the carrier could not be penalized for using the state-issued form. As a result the court found that there was no ambiguity. That logic should not prevail. The form is created by the insurance industry and is not one mandated by the state.

In any event if the state-issued form conflicts with a statute or regulation then the statute or regulation controls. United States v. GEICO, 409 F.Supp. 986 (E.D.Va., 1976) However if the state-issued form requires greater coverage than provided by the statute, then the carrier is required to provide that expanded coverage. Neff v. Providence Washington Insurance Co., 1998 U.S.D. LEXIS 15866 (W.D.Va. 1998)

Personal Injury Insurance Coverage-Misrepresentations

Most insurance policies involve the completion of an application by the insured. If there is a misrepresentation in that application, that may be a basis for voiding the policy. Virginia Code § 38.2-309 allows the carrier to deny coverage where the applicant has made a representation that was untrue and material. For instance stating that your address is in New York when in fact you live in Fairfax County may be a material misrepresentation that voids the policy. Brant v. Parsio, 27 Va. Cir. 339 (1992) Also the failure to identify all household members of driving age may void the coverage. Portillo v. Nationwide, 277 Va. 193 (2009)

To void the policy there must be both reliance by the carrier and materiality. Montgomery Mutual v. Riddle, 266 Va. 539 (2003)