Tiffany Chow appealed to the District Court in favor of IDS Property Casualty Insurance Company in this insurance coverage dispute. In IDS Property Casualty Insurance Company v. Tiffany Chow No. 19-55837, United States Court of Appeals for the Ninth Circuit (July 14, 2020), Chow argued that she was entitled to full policy boundaries even though politics excluded her. The Court of Appeal allowed her to receive the statutory limit of $ 30,000 but refused to allow her to receive the stated UM limit of $ 250,000.
The car insurance policy provided $ 250,000 per person in underinsured motorist bodily injury coverage to a named insured or a "relative" of a named insured. The policy defined a "relative" as "a person who is related to you through blood, marriage, registered domestic partnership under California law or adoption who resides in your household and whom you have previously identified with us." The district court concluded that Chow was not entitled to coverage because she had not previously been identified for IDS as a resident relative. In fact, the said insured had informed IDS that Chow was not resident in their household.
The district court further concluded that Chow was covered by the implied terms of the policy. In the absence of a written exception, California law requires a car insurance policy to provide underinsured motorists with bodily injury coverage of at least $ 30,000 per person to a relative of a named insured "while residents of the same household." The district court found that Chow, a resident relative, was covered by $ 30,000 under California law. Chow appealed, claiming that her coverage was $ 250,000 rather than $ 30,000.
Chow claimed that the "previously identified" claim could not be enforced, and when this claim is read by the policy, she meets the policy definition of "relative". [1
Under California law, political exceptions cannot be enforced to the extent that they violate California law. Thus, the "previously identified" requirements of the policy are not enforceable, but only to the extent that it denies all coverage to unidentified resident relatives. However, it is enforceable to the extent that it denies coverage over the statutory minimum requirement of $ 30,000.
Unless the insurer and the said insured make a written exemption, an insurance policy governed by its terms will be maintained to provide uninsured motorist coverage in the amounts mandated in the charter. Each insurance must be read to provide the minimum coverage required by law under such insurance, even if the insurance does not.
The purpose of the uninsured motorist's charter is not to make all drivers whole from accidents with uninsured drivers, but to ensure that drivers injured by such drivers are protected to the extent they would have been protected if the driver had taken out the statutory liability insurance in the event of a fault.  The Ninth Circuit rejected Chow's claims that the district court erred in concluding that the requirement of "previously identified" was not clear, distinct and conspicuous. Although the policy did not clearly or unequivocally state that Chow was entitled to $ 30,000 in underinsured motor vehicle coverage, Chow points to no authority requiring a policy to clearly define policy terms that increase – rather than decrease – insurance coverage.  The policy unequivocally required the said insured to identify Chow as both a relative and a household resident. Chow was not identified as such. As a result, she was not entitled to the full amount of the specified coverage, but by law she was entitled to the statutory minimum.
The Ninth Circuit read the entire policy and found that it excludes coverage for a resident relative not previously identified to the insurer prior to a loss, to be clear and unambiguous. Since the exclusion itself was visible and known to the said insured who informed the IDB that Chow was not a resident relative, she was not entitled to the full limits but received the statutory minimum. Facts can often be difficult things and the difficult things – and a charter – made it possible for Chow to get up to $ 30,000 in UM coverage that IDB did not intend to pay but did not get the $ 250,000 she wanted.
© 2020 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to employment as an insurance consultant specializing in insurance coverage, handling insurance claims, insurance care and insurance fraud almost equal for insurers. He also acts as arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance protection and attorney management attorney and more than 52 years in the insurance industry. He is available at http://www.zalma.com and firstname.lastname@example.org.
Mr. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award.
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