Non-custodial Minor Child not Covered by UM Policy

On June 26, the Alabama Supreme Court considered, in State Farm v. Brown, __So.2d__ (Ala. 2009), the question of whether a non-custodial minor child was entitled to underinsured motorist (UIM) benefits under her father’s insurance policy.  The plaintiff, an unmarried, unemancipated minor who attended high school and lived primarily with her mother, was injured in an automobile accident.

The Court analyzed the policy, which provided UIM coverage to the “relatives” of a named insured.  A “relative” is defined in the policy as:

A person related to you or your spouse by blood, marriage or adoption who lives primarily with you.  It includes your unmarried and unemancipated child away at school.

The plaintiff argued that the second sentence of the definition should be read separately from the first, and that:

…there is no need to first determine with whom an unmarried and unemancipated child who is away at school “lives primarily.” Rather, Rachel argues, in order to recover UIM benefits under Mr. Brown’s policy, she merely needs to be away from Mr. Brown’s home and enrolled in school.

The Court, noting that it had never addressed the second sentence of the definition, first held that the entire definition of “relative” was not ambiguous.

When analyzing an insurance policy, a court gives words in the policy their common, everyday meaning and interprets them as a reasonable person in the insured’s position would have understood them.  Western World Ins. Co. v. City of Tuscumbia, 612 So.2d 1159 (Ala.1992).  If, under this standard, they are reasonably certain in their meaning, they are not ambiguous as a matter of law and the rule of construction in favor of the insured does not apply.  Bituminous Cas. Corp. v. Harris, 372 So.2d 342 (Ala. Civ. App. 1979).  Only in cases of genuine ambiguity or inconsistency is it proper to resort to rules of construction.  Canal Ins. Co. v. Old Republic Ins. Co., 718 So.2d 8 (Ala. 1998).  A policy is not made ambiguous by the fact that the parties interpret the policy differently or disagree as to the meaning of a written provision in a contract.  Watkins v. USF&G, 656 So.2d 337 (Ala. 1994).  A court must not rewrite a policy so as to include or exclude coverage that was not intended.  Upton v. Mississippi Valley Title Ins. Co., 469 So.2d 548 (Ala. 1985).

As the definition was not ambiguous, the Court held that its “second sentence is obviously intended to expand on the first sentence and to indicate that a child who is away at school is not excluded from the term ‘relative’ in the policy by virtue of the language ‘lives primarily with you.'”  Finally, the Court held that the term “away at school” did not apply to “a child whose primary residence is not the policyholder’s residence and is attending a local high school,”  and that the plaintiff was not entitled to UIM benefits under her father’s policy.

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