Watch Video
News
“What’s In Your Policy? II”
September 3, 2009
You have just purchased automobile liability insurance coverage that provides $100,000 per person/$300,000 per accident in the event you are responsible for injuring another person in a motor vehicle crash. The coverage provides protection to you for all claims from all persons you injure – correct? Maybe not!
Some automobile insurance policies have been issued that provide reduced-liability (drop-down) limits on bodily injury coverage for resident family members. Minnesota courts have upheld the validity and enforceability of such provisions.
This means that even though you may be responsible for an injury to a family member, the family member may be limited in claiming only minimum limits in spite of the fact that you have paid for higher limits.
The insurance policy which was subject to interpretation by the Minnesota courts was issued by USAA. Now that the Minnesota courts have ruled that the provisions are valid and enforceable, other companies may follow suit. Therefore, when shopping for automobile liability insurance, be sure to inquire whether the policy you are interested in purchasing contains drop-down limits. If it does, you may be well advised to continue shopping until you find a policy that will adequately protect your family.
A similar policy provision is oftentimes found in homeowner’s liability policies. Many homeowner’s policies will not provide any liability coverage for a claim made by a family member. This is commonly referred to as an inter-family exclusion. Once again, we urge you to shop carefully and ask your agent the “difficult” questions.
As always, you may call Swor & Gatto, P.A. anytime without cost or obligation to discuss your insurance questions.