III. Covered Accidents

• Library: The Law of Automobile Insurance in SC (SCBar) (2015 Ed.)

III. Covered Accidents

A. General

The common denominator in all uninsured motorist claims is that the negligence of the uninsured motorist must be established as the proximate cause of the claimant's injuries, because the uninsured motorist endorsement insures only those sums which the claimant is legally entitled to recover as damages from the owner or operator of an uninsured vehicle.³⁵ This means that the claimant must recover a judgment under standard negligence principles against the uninsured motorist. Aside from the common element of recovering a judgment against the uninsured motorist, the conditions of coverage differs between claimants.

B. Intentional Acts

"In South Carolina an 'accident' is viewed from the victim's perspective and, if the injury, although intentionally inflicted, is as to the victim 'unforeseen and not the result of his own misconduct,' it is accidentally sustained within the meaning of the ordinary accident insurance policy."³⁶ Accordingly, an insured who was intentionally shot by an unknown driver suffered an accidental injury.³⁷

C. The Named Insured, His Relatives and Family Members

The named insured, the insured's spouse and resident relatives are covered for their damages arising out of accidents with uninsured motorists whether they are "in a motor vehicle or otherwise,"³⁸ that is, "at all times."³⁹ In the original formulation of what is now section 38-77-30(7) "the use of the words 'while in a motor vehicle or otherwise' was appropriate, although probably unnecessary, to emphasize the legislative intention that the named insured, his spouse and his or her relatives residing in the same household should have the benefit of uninsured motorist coverage at all times, as distinguished from permissive users or guests who should be covered only when occupying the insured automobile."⁴⁰

Uninsured motorist coverage for this class of insureds "arises without regard to the activity in which the insured was engaged when injured by the negligence of an uninsured motorist, whether as a motorist, pedestrian, laborer or otherwise. This results from the nature of the insurer's obligation with respect to uninsured motorist coverage, rather than from the use of the words 'or otherwise' in the definition of the term 'insured.'"⁴¹

Although the insured is often involved in an accident while driving a vehicle listed in his policy declaration pages, coverage is not limited to such cases for this class of insureds. Thus in Boyd v. State Farm Mutual Automobile Insurance Co.,⁴² the son of the named insured was entitled to coverage when he was injured by a hit-and-run motorist while walking home from school. The claimant in Chapman v. Allstate Insurance Co.,⁴³ the daughter of the named insured, was injured when she was pushed out of an uninsured vehicle by a scorned suitor, who had previously attempted to molest her. After stating that the injury was an accident when viewed from the standpoint of the insured, the court held that she was entitled to coverage because it was "clear the injury arose out of the use of the uninsured automobile."⁴⁴

At issue in Bogan v. Home Insurance Co.⁴⁵ was the validity of a "family member" exclusion in an uninsured motorist endorsement which the supreme court had previously upheld for liability coverage. Such an exclusion seeks to bar coverage for bodily injuries to an insured while occupying an automobile owned by the named insured or resident relative which is not listed in the policy's declaration pages.⁴⁶ Pointing out the distinction between liability and uninsured motorist coverage, the court invalidated the exclusion, stating that:

Unlike the provisions relative to liability coverage, the statute plainly affords uninsured motorist coverage to the named insured and resident relatives of his or her household at all times and without regard to the activity in which they were engaged at the time. Such coverage is nowhere limited in the statute to the use of the insured vehicle, and cannot be so limited by the policy provisions.⁴⁷

The supreme court reached a similar conclusion in Nationwide Mutual Insurance Co. v. Erwood, where a wife sought UM benefits from one of her "at home" vehicles when she was injured as a passenger on her husband's uninsured motorcycle.⁴⁸ Nationwide denied coverage based on a policy provision that limited UM coverage to the lower of the limits of the at-home policy or the limits on the vehicle involved in the accident, where the involved vehicle was owned by the insured or a relative. Since the vehicle involved in the accident was owned by her spouse and was uninsured, Nationwide took the position no coverage was applicable under this policy provision. The court noted that this provision sought to limit mandatory UM coverage and was invalid.⁴⁹

The claimant in Sheffield v. American Indemnity Co.⁵⁰ was not involved in an automobile accident, but instead made a claim for his consequential damages, including medical expenses, incurred on behalf of his wife who was injured as a result of the negligence of an uninsured motorist. The court denied recovery, but the decision can be read as simply holding that the policy limits were exhausted because the wife had already collected single accident limits of the uninsured motorist coverage.

D. Permissive Users

1. General

The second class of insured under the uninsured motorist statutes is:

Any person using, with the consent of the named insured, "the motor vehicle to which the policy applies and a guest in such motor vehicle to which the policy applies."⁵¹

Coverage for this class of insureds differs significantly from that provided for the named insured, his or her spouse, and resident relatives, in several important respects. The second class is covered only when their injury occurs while (1) "us[ing];"⁵² (2) the "motor vehicle to which the policy applies."⁵³ The claimant must also be using the vehicle with the consent, express or implied, of the owner.⁵⁴ The "consent" requirement can also be examined under the same precedent as applying to other omnibus coverage.

The South Carolina Supreme Court explored the limits of who may qualify as a permissive user in Unisun Ins. Co. v. Schmidt.⁵⁵ The claimant was injured while riding as a passenger in the insured's vehicle. The claimant was given permission at all times to be a passenger in the vehicle for the day of the accident. However, the driver of the vehicle was not the insured and did not have permission from the insured to drive the vehicle. The court of appeals ruled that the claimant was not an insured of the vehicle because her permissive occupancy ended when the vehicle was operated by a non-permissive user.⁵⁶ The supreme court reversed and held that the claimant's use of the vehicle was consistent with the use to which the insured consented and her permissive use could not be destroyed by the non-permissive actions of another. Thus the claimant was entitled to UM coverage under the insured's policy on the vehicle because her use was permissive and the vehicle's insurer successfully denied liability coverage because of the non-permissive use of the driver.

The supreme court explored a similar issue holding that the consent for guest passengers can create special circumstance where the guest passenger is determined to be a permissive user, but the driver is not authorized to use the subject vehicle. In Auto-Owners Insurance Co. v. Rollison, the court held that the...