Son Not Covered Under Father’s Business Auto Policy
The Wisconsin Supreme Court found that a father's business auto policy did not provide underinsured motorist (UIM) coverage for his son. Lisowski v. Hastings Mut. Ins. Co., 2009 WI 11. The plaintiff, Jonathan, sought UIM coverage under a business auto policy issued to his father, Dennis. The injured plaintiff was not the named insured and the vehicle was not listed in the business policy.
The Lisowskis owned multiple personal and business vehicles insured under policies with several companies. The father owned a Chevy Lumina, a Chevy pick-up, a Dodge Avenger and a Mack semi-tractor. Policies for the Chevy Lumina and pick-up were obtained, but had lapsed at the time of the accident. The Dodge Avenger was purchased for Jonathan. Jonathan personally insured the car through Progressive Northern Insurance Company, but he did not purchase UIM coverage with that policy. The Mack was used exclusively for farming and was covered by a Hastings business auto policy which included a UIM endorsement.
At the time of the accident, Jonathan was a passenger in his Dodge Avenger which was being driven by a friend. Jonathan sought UIM coverage under the Hastings policy as a family member of the named insured. Hastings denied coverage on the basis that the UIM policy applied to only covered autos. The trial court found in favor of Hastings and dismissed the complaint.
Initially, the appellate court certified the appeal to the supreme court. The supreme court declined review. In an unpublished decision, the appellate court affirmed the trial court. The supreme court then accepted review.
The high court framed the issue as turning on the language of the policy's declarations page and the language of the endorsement for UIM coverage. On the declarations page, Item One listed Dennis Lisowski as the named insured. Item Two, the Schedule of Coverages for Covered Autos, stated that, "Each of these coverages will apply only to those 'autos' shown as covered 'autos'. The business coverage form stated that "any auto" meant "Specifically Described 'Autos'." This is further defined as "[o]nly those 'autos' described in Item Three of the Declarations for which a premium charge is shown. . . " Item Three of the declarations contained the "Schedule of Covered Autos You Own" which only listed the Mack.
There was no dispute that Jonathan, as a family member, was an insured under the father's business auto policy. Hastings argued that the "for a covered auto" language was a part of the policy and under that language the Dodge Avenger was not a covered auto to which the UIM endorsement applied.
Wisconsin §632.32(5)(j) permits insurers to exclude coverage:
A policy may provide that any coverage under the policy does not apply to a loss resulting from the use of a motor vehicle that meets all of the following conditions:
1) Is owned by the named insured, or is owned by the named insured's spouse or a relative of the named insured if the spouse or relative resides in the same household as the named insured.
2) Is not described in the policy under which the claim is made.
3) Is not covered under the terms of the policy as a newly acquired or replacement motor vehicle.
The business coverage form explicitly limited coverage to "Specifically Described 'Autos'." The court found that this was an economic decision made by the father when he bought the Hastings policy. Other levels of coverage were available which provided coverage for any autos owned by the policy holder.
The court held that the "for a covered auto" language on which the case hinged was substantive language and that when the provisions of the policy were read together, the language was not ambiguous. It found that Crandall v. Society Insurance, 2004 WI App 34, 269 Wis. 2d 765, 676 N.W.2d 174 controlled the outcome. Similar to Crandall, this case presented a UIM endorsement of a business auto policy and involved an injured party who was not the named insured, a driver who was not an insured under the policy and a vehicle not listed in the policy. Even if the "covered auto" language were to be characterized as an exclusion, the court found that it was valid because the conditions of §632.32 were satisfied.
