In a recent Wisconsin case, Smith v. Acuity Insurance, Appeal No. 2014AP1587, the Court was confronted with an interpretation over the “drive other car” exclusion within a policy issued by Acuity Insurance.
In this case, the plaintiff, while riding a motorcycle, was involved in a motor vehicle accident with another vehicle who was covered by a liability policy. In addition, the plaintiff also had his own policy covering his own motorcycle. Despite receiving the policy limits of the other driver’s insurance policy and also being compensated pursuant to his own policy covering the motorcycle, the plaintiff made an additional claim for underinsured motorist benefits that named two of his automobiles, but not his motorcycle.
Acuity denied the claim for benefits stating that the motorcycle was not listed on the declarations page and the subject policy specifically excepted coverage of motor vehicles owned but not listed in the written agreement.
In contesting the plaintiff’s claim for underinsured motorist benefits, Acuity argued that the “drive other car” exclusion in the insurance policy it issued to the plaintiff barred his claim. The Circuit Court agreed with Acuity holding that the policy contained a “valid and enforceable” drive other car exclusion which precluded the plaintiff from obtaining underinsured motorist benefits.
The Appellate Court looked closely at the subject policy which indicated that the subject policy provided an initial grant of underinsured motorist coverage, but with the initial grant of coverage being excluded pursuant to its provision which stated that “underinsured motorist coverage does not apply to bodily injury to a person … occupying, or struck by, a land motor vehicle owned by you for which insurance is not afforded under this section”. The Court then referred to the declarations page which listed two vehicles but not the subject motorcycle involved in the subject accident. As such, the Court concluded “the terms of his contract clearly barred plaintiff from recovering underinsured motorist coverage in this instance – while operating a vehicle he owned but did not pay a premium to insure with Acuity.” The bottom line is that if the plaintiff wanted underinsured motorist coverage through the subject policy, he should have listed it and paid a premium for the indicated coverage.
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