6.1 Who Is an Insured

• Jurisdiction: Arizona

The standard automobile policy contains two primary areas of coverage: liability coverage and uninsured/underinsured motorist coverage. Each of these coverages defines "who is an insured" differently. (A complete discussion of UI/UIM issues follows in Chapter 7.)

For purposes of liability coverage, the standard personal automobile policy covers named insureds^[1] as well as a "family member." The term "family member" is usually defined as "a person related to you by blood, marriage or adoption who is a resident of your household." Spouses^[2] are covered if they are a resident of the same household. The person seeking coverage as a "family member" or "spouse" must hold that status at the time of the liability event.^[3]

Permissive users of an insured vehicle are also covered for liability claims by the standard personal automobile policy. A.R.S. Sec. 28-4009(A)(2) requires all automobile liability policies to contain what is commonly called an "omnibus" clause. The statute provides in relevant part:

A. An owner's motor vehicle policy of liability insurance must comply with the following requirements:

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2. It shall insure the person named in the policy as the insured and any other person, as insured, using the motor vehicle or motor vehicles, with the express or implied permission of the named insured. . . .

(Emphasis added.) This omnibus clause is a part of every automobile policy, regardless of whether the policy expressly so states.^[4] Under Arizona law, the driver of an automobile causing damage or injury by its negligent operation is presumed to be using the automobile in the business of the owner and, therefore, with the owner's permission.^[5] The presumption of permission is rebuttable. The supreme court in Universal Underwriters Insurance Co. v. State Automobile & Casualty Underwriters^[6] rejected the so-called "hell or high water rule." This rule establishes a conclusory presumption that if the vehicle was originally placed in the possession of a person by another person having proper authority, then, despite "hell or high water," the operation of the vehicle is considered to be within the scope of the permission granted, regardless of how grossly the terms of the original grant of permission may have been violated.^[7]

Arizona recognizes that permission to use a vehicle can be both express or implied.^[8] Implied permission may be inferred where there is a course of conduct or relationship between the parties indicative of mutual acquiescence or a lack of objection signifying assent.^[9] A "course of conduct may be shown by the practice of the parties over a period of time preceding the day upon which the insured vehicle was being used.^[10]

Am implied pattern of use can be overruled by an intervening express statement revoking permission.^[11]

In James v. Aetna Life & Casualty Co.,^[12] the court adopted the "minor deviation rule" in determining when a deviation from the purpose and use for which permission to drive was given would preclude...