7.4 Who Is an Insured

• Jurisdiction: Arizona

For purposes of UM and UIM coverage, the standard personal automobile policy defines three classes of insureds. In his treatise on insurance, Professor Long discusses these classifications:

This definition establishes three classes of insured claimants. The first is the named insured, and any member of his family residing in his household. The second group includes any person occupying an insured automobile at the time of the accident. . . . For this provision, it is necessary to determine whether or not a given vehicle is an insured vehicle within the meaning of the policy. The third would seemingly cover persons with derivative claims such as loss of consortium or wrongful death.^[50]

The Arizona courts have not formally recognized this classification scheme. However, they have implicitly recognized the classification by result. Class 1 insureds are those persons entitled to the broadest protection. They are protected when they are driving a motor vehicle or riding as a passenger, as well as when they are injured by an insured motor vehicle while walking, standing, or riding a bicycle. The supreme court discusses this class of insureds in Calvert v. Farmers Insurance Co.^[51] The Arizona courts have implicitly recognized Class 2 insureds-those persons entitled to protection when such persons are "occupying" an insured vehicle-in Manning v. Summit Home Insurance Co.^[52] and Alcala v. Mid-Century Insurance Co.^[53]

In Calvert, the court considered an exclusion that denied coverage to an insured injured by an uninsured motorist while the insured was occupying a vehicle owned by him but not listed in the policy. The court found the exclusion to be invalid under Arizona's Financial Responsibility Act. The general analysis of the court is important to the coverage question at hand. The court found there was nothing in Arizona's uninsured motorist statutes that limited coverage depending "on the location or status of the insured." The court ruled that Arizona's UM protection is portable. "The insured [named insured] and family members insured are covered not only when occupying an insured vehicle, but also when in another automobile, when on foot, when on a bicycle or when sitting on a porch."^[54]

In Manning, the court considered whether the insured was "occupying" a motor vehicle as defined by an insurance policy's UM provision, that is, whether she was a Class 2 insured. The insured and his passenger, Deanna Manning, were returning from Colorado to Phoenix in an insured vehicle when they encountered ice on Interstate 40 east of Flagstaff. The insured stopped to put tire chains on his car, and both he and Ms. Manning got out of the car. The insured began straightening the chains to better position them to put on the rear tires, and requested Ms. Manning's assistance. Ms. Manning walked from the passenger side of the car to behind the vehicle's license plate. Ms. Manning was standing two or three feet from the rear of the car when, less than a minute later, she was hit from behind by another car. At the time she was struck, Ms. Manning claimed that she was waiting to help the insured attach the chains to the car.

The court acknowledged that Ms. Manning would be covered by the UM provisions of the insured's policy if she was "occupying" the insured vehicle at the time of the accident. The determination whether she was "occupying" the vehicle was dependent upon whether she was "in or upon or entering into or alighting from" the vehicle at the time of the accident, in accordance with the definition of "occupying" set forth in the policy. The court immediately ruled that Ms. Manning was not "in" or "entering into" or "alighting from" the vehicle at the time of the accident. Therefore, the only remaining question before the court was whether Ms. Manning was "upon" the vehicle at the time she was struck. The insurance carrier argued that Ms. Manning was not "upon" the insured vehicle because she was standing two or three feet away from the vehicle at the time she was struck. Moreover, she was not actively engaged in placing the tire chains on the insured vehicle.

The court in Manning found that the term "upon" was ambiguous. Relying upon the general rule of construction that where various jurisdictions have reached different conclusions as to the meaning, intent, and effect of the language of an insurance contract, there is a strong indication that the policy provision is ambiguous. Because other jurisdictions had reached differing conclusions in construing the term "upon" the automobile, the court found that the term was ambiguous. In reaching this conclusion, the court acknowledged that one line of authority had held that physical contact with the automobile is necessary before the insured is "upon" the vehicle. However, the court found such an interpretation to be overly narrow and unwarranted. A strict interpretation of the term would create "on-again off-again" coverage depending upon the precise stage of activity in which a person was engaged. The court made the following observation:

While getting out of the auto, a person would be an occupant and covered; after closing the door but still touching it, there would be coverage; after removing his hand from the door, there would be no coverage; while walking to the front of the auto, there would be no coverage; after arriving at the front of the auto, and placing his hand on the front hood, there would be coverage again.^[55]

The court concluded that the policy did not depend upon actual physical contact in all instances, and that such an unbending requirement would be both arbitrary and illusory.

The court in Manning adopted the following general statement:

It seems to us that it was the intent of the insurer, by the language used, to provide for coverage in every case in which the owner was using the automobile and in such a position in relation thereto as to be injured in its use. In reaching a conclusion on this subject, not only the act in which the insured was engaged at the time, but also his purpose and intent must be considered. So construed, the...