Wednesday, January 9, 2013

Notice of Change to Household Exclusion Required

In the Lawrence County case of Oesterling v. Allstate Ins. Co., No. 11429 of 2008 (C.P. Lawrence Co. Dec. 17, 2012 Piccione, J.), the court addressed the applicability of a household exclusion which was added to a policy several years after the policy was initially purchased.

Allstate Insurance Company brought the matter before the court by way of a Motion for Summary Judgment which was denied by the court.

At the time of the accident, the injured party was operating a scooter that was involved in an accident with another vehicle.  The injured party recovered from the tortfeasor and from the separate UIM carrier that covered the scooter.  When the injured party turned to Allstate, which covered other vehicles owned by the injured party, Allstate denied coverage on the grounds of the household exclusion in the policy given that the scooter was not covered under the injured party's policy with Allstate.

In response, the Plaintiff argued that he was not notified by Allstate of a change in the policy terms after it was originally purchased by the Plaintiff.

In denying Allstate's Motion for Summary Judgment, the Oesterling court ruled that the exclusion clearly applied but that if the change in the policy was a material change, it must be shown that the insured was put on notice of the change by the carrier.

As such, the court ruled in this matter that a jury would decide whether a change in wording to household exclusion that was made to the auto policy several years after the policy was initially purchased constituted a material alteration of coverage. If so, Allstate had the burden to notify the insured of the change to ensure that he understood and accepted it.

However, if the jury determined that the household exclusion was of a type that was typical of such a policy then the insured would have had the burden to read and understand his policy.

These were the disputed issues of fact that the court left for the jury to decide.

Anyone desiring a copy of this Oesterling v. Allstate case may click this LINK.

I send thanks to Attorney Scott Cooper of the Harrisburg, PA law firm of Schmidt Kramer, as well as Attorney Paul Oven of the Moosic, PA law firm of Dougherty, Leventhal & Price for bringing this case to my attention.

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