An almost universal exclusion in personal automobile policies is one that excludes coverage for bodily injury to the named insured or family members. There are a number of reasons why such exclusions are included in auto liability policies. One is the risk of collusion between or among family members that could lead to fraudulent or inflated damages claims. Rather, injury to the named insured and family members is covered, but under the medical payments coverage, with its lower limits, not the liability coverages. A few states prohibit such family member exclusions, but they are a decided minority.
This manner of structuring these coverages also recognizes the fact that most persons have medical insurance, if not also disability insurance. Often, such agreements have provisions requiring the insured to reimburse the health plan to the extent they obtain recovery from other sources of insurance. Such provisions are common and need to be understood and contemplated, especially before a person enters into a contingent fee retainer agreement with an attorney.
The average person needs to understand that typically the attorney’s contingent fee does not include any costs of litigation. The fee is calculated on the basis of the gross amount of a settlement or judgment, regardless of any contractual indemnity or reimbursement obligations the insured may have under a health insurance plan.
Thus, if an insured retains an attorney after an accident on a contingent fee basis, the fee does not include costs or liens that a health insurer or workers compensation insurer may have against the ultimate recovery. After the attorney’s fee is deducted and costs are paid, the insured could find him- or herself in the position of owing money to reimburse a workers compensation or health insurer and have no net recovery from the personal injury suit.
The ISO personal automobile policy’s liability coverage precludes coverage for any insured who intentionally causes bodily injury or property damage. The manner in which this exclusion is worded is somewhat narrower than the intentional acts exclusion of homeowner’s liability coverage.
The focus of the intentional acts exclusion of homeowners policies is the insured’s intent to commit the act that results in bodily injury or property damage, regardless of whether the insured intended bodily injury or property damage to result. The automobile liability intentional acts exclusion is narrower, because its focus is on the insured’s intent to commit the bodily injury or property damage that resulted.
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Note: This article was sent to us by: Walt Bielfield at 10072010
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