A Box Truck Crash: Exclusion in Definition of “Auto” Precluded Coverage

December 16, 2016 | Insurance Coverage

The U.S. Court of Appeals for the Eighth Circuit has upheld a district court’s decision that a personal auto insurance policy did not provide coverage for an accident involving a box truck, which was excluded from the definition of covered “auto.”

The Case

A woman struck by a rented box truck obtained a $225,000 consent judgment against the truck driver. After accepting $25,000 from the rental company, reflecting the limit of its policy on the box truck, the woman sought to recover the remainder from a policy issued to the truck driver’s wife and, derivatively, to the truck driver.

The insurer went to federal court in Kansas, seeking a declaration that it had no obligation to pay on behalf of the truck driver. The district court granted summary judgment in favor of the insurer, and the woman appealed to the Eighth Circuit.

The Eighth Circuit’s Decision

The circuit court affirmed.

In is decision, the circuit court explained that the policy issued to the truck driver’s wife defined “insured person” to include the named insured and relatives with respect to an accident arising out of the use of “an auto” or trailer. The circuit court added that the policy defined “auto” to exclude “cargo cutaway vans or other vans with cabs separate from the cargo area.”

It then found that the rented box truck did not meet the definition of an auto because it fell within the exclusion.

Accordingly, it ruled, the “clear and unambiguous terms” of the policy demonstrated that the truck driver was not an insured person because he was not using or operating a covered auto.

The Eighth Circuit rejected the woman’s contention that the policy’s “other insurance” clause should be interpreted to mean that the policy provided excess coverage for accidents involving vehicles that did not necessarily meet the definition of “auto” for primary coverage. The circuit court agreed with the district court that the clause had “no application where, as here, the policy did not provide coverage in the first place.”

The case is Progressive Northwestern Ins. Co. v. Handshumaker, No. 16-3045 (10th Cir. Nov. 8, 2016).

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  • Robert Tugander

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