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In Matters Of Insurance Coverage, Every Word Has A Purpose

A fight breaks out on the insured’s front lawn, and the homeowner’s child is involved in a scuffle with a neighbor’s child. The insured reports the incident as a precaution before any indication that a claim might result. Subsequently, the insured receives a $10,000 medical bill from the parents of the other child for treatment of a detached retina, with a threat to sue the homeowner for negligent supervision if the bill is not paid immediately. Although the claim sounds in negligence, coverage (defense and/or indemnity) under the insured’s homeowner’s liability policy is not a certainty.

Coverage under a homeowner’s liability policy for a claim of negligent supervision can turn on whether the “intended injury exclusion” uses the word “the” or the word “an” or “any.” Undoubtedly, there are policies now that are explicit in terms of who is covered for bodily injury caused by an intentional act. The purpose of this article is not to address the nuances of various homeowner’s policies, or frankly, whether a majority of policies cover claims of negligent supervision or not. This article is meant to highlight the fact that in addressing coverage issues, every word has a purpose.

A typical homeowner’s policy provides liability coverage for claims made against an “insured” for damages because of “bodily injury” caused by an “occurrence.” In those policies, an “occurrence” is defined as an accident which results in “bodily injury,” and although “accident” is usually not defined, Texas courts have supplied its meaning. Generally, “where acts are voluntary and intentional and the injury is the natural result of the act, the result was not caused by accident even though that result may have been unexpected, unforeseen, and unintended.” Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819, 826-28 (Tex 1997).

Under the scenario portrayed in the opening paragraph, the child’s intentional act of striking another child is not an accident under any definition, and as such, no liability coverage would exist to cover any liability claims brought against the child.

The lack of liability coverage for the child does not necessarily preclude coverage for the parent. Again, every word has a purpose. The reason that coverage for the parent may exist for the intentional act of the child is because of the common “severability of insurance” or “separation of insureds” clause. That provision states that “[t]his insurance applies separately to each insured.” See King v. Dallas Fire Insurance Company, 85 S.W. 3d (Tex. 2002). Thus, there can be an “occurrence” from the standpoint of the parents even when there is not an “occurrence” from the standpoint of the child.

The intent of the severability clause is to provide each insured with separate coverage, as if each were separately insured with a distinct policy, subject to the liability limits of the policy. Utica Mut. Ins. Co. v. Emmco Ins. Co., 309 Minn. 21, 243 N.W.2d 134, 142 (1976). The severability clause serves to provide coverage when there is an “innocent” insured who did not commit the conduct excluded by the policy. Walker v. Lumbermens Mut. Cas. Co., 491 S.W.2d 696 (Tex. Civ. App.-Eastland 1973, no writ)).

In King, Dallas Fire Insurance Company brought a declaratory judgment under a commercial general liability policy seeking a declaration that the underlying claims by an individual who was assaulted by the insured’s employee were not covered. The Supreme Court of Texas held that the severability clause created separate insurance policies for the insured and the insured’s employee, and the employee’s assault on a third person who alleged negligent supervision by the employer was to be viewed from the perspective of the insured employer in determining whether the event was an “occurrence” within the meaning of either the general liability policy or whether the intentional injury exclusion applied.

King unequivocally supports coverage for a negligent supervision claim against an innocent parent, right? There are post-King cases that seem to agree with that proposition. However, those cases overlook an important segment of the King opinion detailing with the actual wording of the “expected or intended injury” exclusion. The “expected or intended injury” exclusion in King excluded coverage for “bodily injury expected or intended from the standpoint of the insured.”

Although there are post-King opinions where the courts miss the significance of the word “the” contained in the King exclusion, one court aptly noted its significance, albeit in addressing an auto exclusion. See Bituminous Casualty Corp. v. Maxey, 110 S.W.3d 203 (Tex. App. – – Houston [1st Dist.] 2003, rev. den’d).

In a case of first impression, the well reasoned opinion in Maxey held that the severability of insurance clause, which required the policy to be read as if each insured were the only insured, did not require the auto exclusion applying to “any insured” to be read any differently from its grammatically accepted meaning. The court summarized the general rules of contract construction, which I will not retread, and held that the term “any insured” means what it says. In other words, the severability clause did not require the courts to replace the words “any insured” in the policy with the words “the insured.”

The rule to remember is that just because one case finds coverage under a general liability clause for negligent supervision does not mean that your policy will provide the same coverage.

In matters of insurance coverage, every word has a purpose, and coverage can turn on something a simple as the words “the,” “an,” or “any.”

Lower Your Car Insurance Premium By Following A Few Tips

Saving money on car insurance premiums would seem to be ideal in these hard times. Competition has affected the auto insurance market too and the insurance companies are offering ways to make your insurance cheaper to stay ahead. Make the most of it along with making a few marked changes so that you do not end up paying high premiums.

Look around for good insurance quotes: All companies do not charge the same premiums so it would be a good idea to shop around and find companies offering you insurance at lower premiums by way of discounts and after estimating your risk factors. Browse online too and look for good discounts being offered.

A Driver’s Education Course would help: This course is usually a day long and costs about $100. This course will actually teach you how to lower your car insurance premiums. The money you pay for the course will be substantiated in a big way by the huge savings you will make.

Safety features lower premiums: Adding safety features to your existing vehicle will also ensure that premiums are less. Features like good anti-lock brakes, electronic seat belts and air bags on either side would be considered to be safety features by the insurance company and they will reduce the premiums charged. This is a ‘win-win’ situation as adding these will mean more safety for you in case of an accident.

Increase your credit course: Your car insurance premiums are based on your credit ratings. When you increase your credit rating make sure to let your insurance provider know and negotiate a lower rate based on this.

Make your car burglar-proof: If you add anti-theft devices like an alarm, or others that can make your car more secure, insurance companies will consider giving you lower rates. So, you pay less plus make your car more secure.

Fuel efficient cars save on insurance: Cars that are fuel efficient or hybrid are environment friendly and hence cost less when it comes to car insurance premiums. This will also save your monthly expenditure on fuel.

Club all insurance amounts: If you own other vehicles, another car, two-wheeler, homeowners, renters or life insurance, calculate your savings if you purchase insurance from the same company. Chances are they will give you a good deal.

Avoid buying fancy cars or sports cars: If you want to slash the payment made for car insurance, then avoid buying flashy models or sports models. These car models are attached to high insurance premiums that go well above the budget. In fact it would be a good idea to consult your provider about the insurance premium before you buy a new model of car.

If high car insurance premiums on your vehicle are going above your budget, then try the above mentioned ways to bring them down. It may require you to spend further but will save money in the long run. The further spending makes you safer on the road so you are actually paying to stay safe. Car insurance is necessary, but should not cost you the earth.

Car Insurance Coverage – Why It Makes Sense to Have the Right One

Most people look at car insurance as a burden, one that they have to bear because of State insurance laws. They buy the bare minimum state mandated liability coverage to stay legal and carry on driving, assuming they are completely covered in case of a mishap. Yet others start with buying multiple car insurance coverages, and over time decide they need to save money, which can be done by cutting on certain coverages. The rude awakening comes when they get into an accident where they are at fault, or have their car stolen or damaged, and realize their policy did not include the necessary car insurance coverage to cover any of these events. A little bit of planning and foresight can help avoid such situations.

Car insurance isn’t rocket science, and all it takes is some understanding of the basic function of each car insurance coverage and then deciding if it’s really worth investing in or not. This is especially true if you have an old beat up car. Would you rather pay for comprehensive and collision insurance and the deductibles as well (at the time of claiming), or does it make more sense to simply go without, and save the premium and deductible money in an emergency fund for your car? Insurance is a gamble and you pay for the peace of mind from knowing that in case of an eventuality you are covered. You may or may not need to use it.

Liability or third party insurance is another area where you need to consider the particulars of your location, the driving skills of the other drivers using the car, and your financial capability to pay the other driver for any damages you might have caused, in case you are found at fault in an accident. If you drive long hours, on congested roads, or if you have a relatively inexperienced driver also driving this car, you might consider keeping a high liability car insurance coverage. TX car insurance laws for example, ask for a minimum liability of 30/60/25 starting January 2011. One in five people in TX are uninsured, so while you want to be sure you get adequately compensated in case of an accident, you might also want to buy Uninsured Motorist/Underinsured Motorist coverage if you live there.

Umbrella insurance is one of the most under rated car insurance coverages. It’s actually a very smart way to increase your liability coverage and comes in handy incase of potentially bankrupting lawsuits. You don’t want to have to pay out of your pocket in case your car hits a school bus full of kids and hurts somebody seriously or ends up totaling a high-end luxury car. It doesn’t cost too much to get $2 million umbrella insurance, and it kicks in only when the upper limits of your liability coverage have been exhausted.

Gap insurance is a good option to invest in if your car is not fully paid for and you still have to make most of the payments. In case your car is totaled, your full car insurance coverage will only pay for the car’s blue book value which factors in its depreciation amount, whereas you will still need to pay your dealer the balance installments for the car, making you upside down on your payments. Gap insurance fills this gap and helps you pay off the balance amount. However, investing in gap insurance is only recommended if you still owe most of the money on your car.

PIP or no fault coverage is mandatory in some states while it isn’t available in others. However if it is available in yours, it’s a good option to look into, after reviewing your health insurance policy. Personal Injury protection coverage takes care of medical, work loss, funeral, survivor’s loss and other maintenance expenses incurred post an accident regardless of who is found at fault in the accident; a good car insurance coverage to consider as it takes so many factors into consideration while calculating your claim account.

So next time you decide to buy yourself just a minimum liability car insurance, think twice. The liability coverage will only compensate others for injury or property damage caused by your car; it will do nothing for you. Also look at the other car insurance coverages and try to strike a good balance of rates and coverage to give you better protection in case of an unforeseen eventuality.