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Georgia Mother Allowed to Proceed With Lawsuit Against Daughter’s Auto Insurer

If you have been in a car accident, your insurance company may attempt to employ every proverbial trick in the book to deny you coverage. Georgia courts are also predisposed to strictly interpret insurance contracts to avoid any ambiguity that may favor the insured party. There are exceptions, as illustrated by a recent Georgia Court of Appeals decision.

King-Morrow v. American Family Insurance Company

In this case, the plaintiff was a woman living with her adult daughter. The daughter held an automobile insurance policy that included uninsured motorist (UM) coverage. The UM coverage applied to “relatives living in the policy holder’s household,” which included the mother.

In December 2011, the mother was injured in a car accident. The insurance company learned of the accident two years later, when the mother filed suit claiming benefits under her daughter’s UM policy. The insurer agreed the mother was covered under the policy, but nonetheless disclaimed coverage on the grounds that she waited too long to notify the company about the accident.

Insurance contracts typically contain a clause that requires the insured to “promptly notify” the insurer in order to receive benefits. Here, the daughter’s policy had a clause that said, “If you have an accident or loss … tell us promptly.” Consequently, “If we are prejudiced by a failure to comply with the following duties, then we have no duty to provide coverage under this policy.”

Based on this language, a Georgia trial court granted the insurance company’s motion for summary judgment. The court agreed this language applied to “each person claiming any coverage” under the policy, which in this case was the mother. Although the plaintiff argued the reference to “you” meant only her daughter and not her, the trial court cited an additional clause in the policy which requires anyone claiming coverage to “cooperate with us and assist us in any matter concerning a claim.”

A divided seven-judge panel of the Georgia Court of Appeals disagreed with the trial court and reversed the grant of summary judgment to the insurer. Judge M. Yvette Miller, writing for the majority, said summary judgment was not warranted here as the policy “is susceptible to two reasonable constructions.” That is, the policy may only require the daughter, as the named insured, to give prompt notice, in which case the mother’s failure to do so does not defeat her claim; or it could mean “each person claiming coverage is also implicitly required to give prompt notice of the accident.” Judge Miller said the majority was unwilling, however, to “broaden the application of the accident-notice provision to apply to anyone making a claim under the policy.”

Judge Gary Blaylock Andrews was the sole dissenting vote. He maintained “the only reasonable construction of [the insurance] policy here is that anyone claiming coverage under the policy must give timely notice of the loss, so as to afford [the insurer] a meaningful opportunity to investigate the claim.” Judge Andrew said it was unreasonable to apply the prompt notification provision to the insured but not other relatives covered by the same policy.