Insurance Coverage Homeowners for Accident with Car at Home

This recent case deals with insurance coverage, and affects the ability of what an injured party can recover when an accident with car at home injures a family member. This is another case in the erosion of what plaintiffs can recover. In this case, Farmers Ins. vs. The Superior Court of Los Angeles, a homeowners’ 2 year old grand daughter was killed when she was run over by the homeowner. This was a very tragic case. The parents of the grand daughter sued the homeowners (the grand parents) under 2 different theories. The first theory was for negligent operation of the vehicle when she was run over. The second theory was for general negligence in the supervision of the grand daughter, by the grand mother.

The real issue was what insurance coverage was there available to the parents of the child who was run over. Farmers insured the home, under a general homeowners liability policy. Farmers also insured the vehicle that ran over the little girl. The auto insurance provided coverage, but the limits were very small. The parents wanted there to be coverage under the homeowners policy that had much more coverage, under the allegation of negligent supervision.

Farmers maintained that there was a valid vehicle operation exclusion, which excluded coverage under the homeowner’s policy for the negligent supervision of the child, because it was the vehicle operation that really caused the accident. The parents of the child argued that it was the negligent supervision of the child that was the cause of the accident. The trial court agreed with the parents saying that the supervision was an “independent” cause of the accident, distinct from the “use” of the vehicle. However, Farmers appealed.

The appellate court reversed, and agreed with Farmers. This is not an uncommon problem. This happens when there are two separate acts of negligence (here it was 1) the supervision, and 2) the driving), and one is excluded from coverage, and the other is not. Supervision is covered, but there was an exclusion for vehicle operation under the homeowners policy. The court said the key is whether or not the “excluded” conduct (here the driving) played an “active role in causing the injury”. If it did, then the exclusion applies, and there is no coverage, even if there was coverage for the negligent supervision.

This case deals with insurance coverages and an accident with car at home, but this ultimately affects what injured parties can recover. It is constantly the job of the attorney to look for parties who have higher coverage limits, or for other parties who are liable, as too often, at first glance, there is not enough insurance available to compensate who has been injured. The attorney needs to look deeper, and elsewhere, from where one might look at the beginning of a case.