Insurance Coverage and Bad Faith

The lawyers at Houston Harbaugh have built a strong reputation over the past several decades representing insurance companies facing the full spectrum of complex legal challenges. No matter how big or critical the challenge, clients turn to the attorneys in Houston Harbaugh’s Insurance Coverage and Bad Faith practice group for our legal and business insights.

No UIM Coverage for a “Driver” Listed in Policy Because She Was Not a Resident of the Named Insured’s Household

In Carter v. Peerless Idem. Ins. Co., No. 684 EDA 2014 (Pa. Super. Feb. 13, 2015) (Unpublished), the Superior Court of Pennsylvania affirmed a trial court’s finding that a woman identified as a “driver” under her mother’s automobile insurance policy was not entitled to underinsured motorist (UIM) coverage under the policy because she failed to establish that she was a resident of her mother’s household and, thus, she was not an “insured” as expressly defined by the policy.

Tanesha Carter (“Carter”) was injured in an accident where she was a passenger in a third-party’s vehicle. Carter sought UIM coverage for injuries she sustained in the accident under an automobile policy issued by Peerless Indemnity Insurance Company (“Peerless”) to Carter’s mother and her mother’s husband. Carter was listed as a “driver” in the Peerless Policy. However, the UIM endorsement in the policy provided that Peerless would only pay UIM benefits to an “insured” for injuries “[s]ustained by an ‘insured.’” “Insured” was defined in part as any “family member” of the named insured (the mother and her husband). “Family member” was defined as “a person related to you … who is a resident of your household.”

Peerless moved for summary judgment on grounds that Carter could not establish that she was a resident of her mother’s household at the time of the accident and, therefore, was not entitled to UIM coverage under the policy. In response, Carter argued that she was entitled to UIM benefits because “there was a reasonable belief that coverage would be extended to her as a listed ‘driver’ on [the] policy.” The trial court rejected Carter’s argument and granted summary judgment in favor of Peerless because Carter could not prove that she qualified as an ‘insured.’ On appeal, Carter argued for the first time that she lived with her mother at the time of the accident and, thus, qualified as an “insured.” The Superior Court, however, held that Carter waived that argument because she failed to raise it in the trial court. The Superior Court also agreed with the trial court’s holding that simply because Carter was listed as a “driver” under the policy did not qualify her as an “insured” under the express terms of the policy. In doing so, the court stated “an insured may not complain that his or her reasonable expectations were frustrated by policy provisions and limitations which are clear and unambiguous.” Accordingly, the Superior Court affirmed.

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Alan S Miller Attorney Houston Harbaugh

Alan S. Miller - Practice Chair

Alan has more than thirty-eight years of experience in complex litigation and counseling, concentrating in the areas of environmental law, insurance coverage and bad faith, and commercial litigation. He chairs the firm’s Environmental and Energy Law practice and the Insurance Coverage and Bad Faith Litigation Practice.

Alan’s environmental law practice has involved counseling, litigation and alternative dispute resolution of matters involving municipal, residual, and hazardous waste permitting and compliance, contribution and cost recovery actions under CERCLA and related state statutes, claims for natural resource damages, contamination from leaking underground storage tanks, air and water pollution regulatory permitting and enforcement actions, oil and gas drilling compliance and transactions, and real estate transactions involving contaminated and recycled industrial sites.