Florida Court Upholds Household Exclusion Clause in Car Insurance Policy – Motzenbecker v. State Farm

Whether a person is covered by an insurance policy for a particular accident is often a matter of examining the fine print. In Motzenbecker v. State Farm, Florida’s Second District Court of Appeals affirms the validity of one clause insurers often rely on in trying to get out of paying a claim.

Adam Smith was injured in an accident while borrowing a car owned by Mr. and Ms. Motzenbecker. Although the couple allowed Smith to use the 1988 Nissan, he claimed that they were negligent by failing to properly maintain the vehicle’s brakes. The Motzenbeckers informed State Farm, with whom they had an auto insurance policy covering the car, of the suit and asked the company to defend them.

State Farm determined that it was not required to defend the couple, however, because the insurance policy’s household exclusion clause barred coverage under circumstances where the driver is operating the car with the owners’ approval. The policy defines insured persons under it to include permissive drivers, or those driving with the consent of the car’s owners. It also expressly states that it does not cover claims for bodily injury by “any insured or any member of an insured’s family residing in the insured’s household.” A trial court agreed with State Farm, granting the company’s request for declaratory relief and ruling that it was not required to defend the Motzenbeckers in Smith’s suit.

The Second District affirmed the decision on appeal. The appeals court rejected the Motzenbeckers’ argument that the household exclusion provision violated public policy. It also distinguished the matter from Allstate v. Wise, a 2001 case in which the court held that an insurance policy clause on which a company tried to avoid coverage for injuries sustained by drivers whose cars were struck by a person fleeing the police was void as against public policy. “This court held that an insurance policy may not contain exclusions that destroy the effectiveness of the policy as to any substantial segment of the public using the highways,” the court explained.

Nevertheless, the court said State Farm was relying on a different clause to avoid coverage in this case. In Wise, Allstate argued that the claims were not covered because the policy specifically barred coverage for intentional acts. Here, however, State Farm pointed to the household exclusion provision in seeking to shirk responsibility. This provision did not violate public policy, according to the court, and was therefore valid and enforceable. “Family or household exclusions have been routinely upheld by Florida courts as lawful and consistent with public policy,” the court explained, including by the Florida Supreme Court in State Farm v. Menendez.

If you have been injured in a car accident or are involved in a related insurance dispute, it is important to have experienced legal counsel in your corner. Contact the South Florida car accident lawyers at Anidjar & Levine. From offices in Ft. Lauderdale, we serve clients throughout the area, including in Hialeah, Coral Springs and Pompano Beach. Call us toll-free at 800-747-3733 or contact us online to schedule a free consultation.

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