IV. Accident Requirement

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

IV. Accident Requirement

The liability policy under the Motor Vehicle Financial Responsibility Act (MVFRA) covers bodily injury or death resulting from an "accident."²⁹² The Act itself does not define "accident;" however, "[a]n accident is generally defined as a 'sudden event or change occurring without intent or volition.'"²⁹³ Furthermore, the accident upon which insurance coverage is claimed must bear a causal relation to or connection with ownership, maintenance or use of the automobile.²⁹⁴ The ISO Endorsement²⁹⁵ similarly excludes liability coverage for any person "who intentionally causes 'bodily injury' or 'property damage.'"²⁹⁶ The courts have ruled that for purposes of uninsured motorist coverage, "intention" is determined by reference to the viewpoint of the insured and not the tortfeasor.²⁹⁷ The issue of whether this type of "intentional injury" exclusion violates the MVFRA has come before the Federal Courts in several cases and most recently before the South Carolina Court of Appeals. A split of opinion has resulted.

The Fourth Circuit held that the exclusion did not violate the MVFRA in Nationwide Mutual Insurance Co. v. Brown.²⁹⁸ In Pennsylvania National Mutual Insurance Co. v. Dawkins,²⁹⁹ the Federal District Court stated:

The plain wording of the Financial Responsibility Act is not contravened by the exclusion of intentional torts. The Act requires only that "accidents" be covered...Nowhere does the Act mandate that intentional torts be covered. Consequently, intentional torts may be excluded in an automobile insurance policy.
Although the general public may suffer a minor loss of insurance protection through the exclusion of intentional torts, unquestionably the use of motor vehicles to inflict intentional harm is a relatively rare occurrence. Moreover, this loss of insurance protection must be balanced against the well established public policy prohibiting individuals from insuring themselves against their own intentionally harmful acts.³⁰⁰

The South Carolina Court of Appeals, on the other hand, ruled, in South Carolina Farm Bureau Mutual Insurance Co. v. Mumford,³⁰¹ that such an exclusion violated the MVFRA because the Act mandated coverage for intentional acts of the insured. The court based its decision on (1) section 38-77-140 requires coverage of "loss from liability imposed by law" and draws no distinction between intentional and negligent acts; (2) code sections 56-9-20(5)(c) and 38-77-220 list permissible exclusions, none of which include intentional acts; and (3) section 38-77-310 expressly authorized an intentional act exclusion for PIP yet none is authorized for liability coverage. The court thought that the word "accident" in section 38-77-140 simply meant "occurrence."³⁰² Lastly, the court stated that since liability insurance is compulsory in South Carolina, its purpose is to compensate victims, and, therefore, the victim's right to recover does not depend upon whether the conduct of the tortfeasor was intentional or negligent.

In State Farm Mut. Auto. Ins. Co. v. Moorer,³⁰³ the Court of Appeals found liability coverage for intentional acts caused by insured's use of a non-owned vehicle, despite the fact that the policy at issue was voluntary and coverage was not mandated by South Carolina law, because the insurer did not exclude intentional acts in the policy. In Mumford, the court held that an insurer must not exclude intentional acts...