State Farm Mutual Automobile Insurance v. Hinkel Ex Rel. Hinkel

OPINION

By the Court,

Batjer, L:

The facts in this case are not in dispute. On September 12, 1968, the respondent, Gordon John Hinkel, a minor, while operating a Honda motorcycle owned by him, was involved in an accident with an uninsured motorist. The collision was caused by the negligence of the uninsured motorist. The respondent, Donald Eugene Hinkel, who is Gordon’s father, owned a 1963 Thunderbird automobile which had been insured by the appellant. The policy included coverage for damage sustained as a result of an accident with an uninsured motor vehicle. Gordon claimed that he sustained injuries caused by the negligence of the uninsured motorist, and upon that ground he sought indemnification under his father’s policy.¹ The case was tried before the district judge, sitting without a jury, and a judgment was entered for the respondents and against the appellant for $9,848.90, plus attorney’s fees and costs. The trial judge, in making the award, held the appellant liable under the uninsured motorist provisions of the insurance policy issued to Donald. One of those relevant provisions is in part:

“Coverage U — Damages for Bodily Injury Caused by Uninsured Automobiles. To pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury sustained by the insured, caused by accident and arising out of the ownership, maintenance or use of such uninsured automobile; . . .”

Gordon, who resided in his father’s home, contends that he is an insured within the meaning of the policy. The policy includes among the insured:

“(1) The first person named in the declarations and[,] while residents of his household, his spouse and the relatives of either;.”

State Farm concedes that Gordon is an insured under the policy’s aforementioned definition of insureds, but argues that he is precluded from recovery in this case by the exclusionary provision of the uninsured motorist section of the policy, which states, in part:

“Insuring Agreement III does not apply:

“(b) to bodily injury to an insured while occupying or through being struck by a land motor vehicle owned by the named insured or any resident of the same household, if such vehicle is not an ‘insured automobile;’.”

The respondents argue (1) that Gordon is covered as an insured under the policy and that he is not barred from recovery by the exclusionary provisions of the policy, and (2) that if Gordon is so barred, then the exclusionary provision is restrictive and contrary to the policy of the State of Nevada as announced in NRS 693.115(1), which provides: “No automobile liability or motor vehicle liability policy insuring against loss resulting from liability imposed for bodily injury or death may be delivered or issued for delivery in this state unless coverage is provided or supplemental to such policy for the protection of persons insured under such policy who are legally entitled to recover damages from owners or operators of uninsured motor vehicles.” (Emphasis added.)

NRS 693.115(1) becomes a part of every policy of insurance to which it is applicable to the same effect as if it were written out in full in the policy itself. Hendricks v. Meritplan Insurance Company, 22 Cal.Rptr. 682 (Ct.App. 1962). An insurance company may limit coverage only if the limitation does not contravene public policy.

The expressed public policy of Nevada is that an insurance company may not issue an automobile or motor vehicle liability policy which does not protect the insured from owners or operators of uninsured motor vehicles, unless the named insured rejects such coverage. NRS 693.115. The named insured, Donald Hinkel, did not reject coverage. Accordingly, he, and the “residents of his house, his spouse and the relatives of either,” were entitled to uninsured motorist protection without limitation. The effort by the appellant to restrict that protection by an exclusionary provision violates the expressed public policy. It was not the intent of the legislature to require the appellant to offer protection with one hand and then take a part of it away with the other. In Travelers Indemnity Company v. Powell, 206 S.2d 244 (Fla.Ct.App. 1968), the court annulled the same exclusionary clause we are here concerned with, noting that it was not the intention of the legislature to limit coverage to an insured by specifying his location or the particular vehicle occupied at the time of injury. The legislative expression of public policy denied court power to honor such a limitation.

Our statute is forthright and clearly written. It does not contain the myriad of exceptions found in other jurisdictions. The exclusionary provisions of the policy are void and unenforceable because they are repugnant to the intent of the statute and against public policy. In Aetna Insurance Company v. Hurst, 83 Cal.Rptr. 156, 158 (Ct.App. 1969), that court said: “Under the unqualified language of the statute his coverage is not dependent upon whether or not he is in any kind of vehicle. The fact that he was riding an uninsured motorcycle thus has no bearing upon his coverage as defined by the statute.”

We find the same reasoning applied to other efforts by the insurance companies to limit uninsured motorist protection. In Butts v. State Farm Mutual Automobile Ins. Co., 207 S.2d 73 (Fla.Ct.App. 1968), the court struck down an effort to exclude the son of the named insured. In Vaught v. State Farm Fire & Casualty Co., 413 F.2d 539 (8th Cir. 1969), the court annulled an attempt to exclude automobiles owned by the city. In Hendricks v. Meritplan Insurance Company, supra, the court would not allow the insurance company to exclude from coverage one under 25 years of age who was operating the insured vehicle. The underlying premise of each decision was that the attempted exclusion from coverage violated the public policy of the statute and was, therefore void.

If we are to accept the appellant’s contentions, Gordon was afforded uninsured motorist coverage in every conceivable place on the face of this earth except upon his own motorcycle. Nowhere in the unambiguous language of our statute do we find any authorization for that result.

It is clear intent of the legislature that NRS 693.115(1) requires protection against the peril of injury caused by an uninsured motorist to a “person insured.” The legislative purpose in creating compulsory uninsured motorist coverage was to give needed relief to injured parties through insurance paid for by the insured.

The appellant argues that public policy should not permit an owner of two or more motor vehicles to pay for insurance on only one of them and recover compensation for his injuries sustained while operating one of the others. This view has been accepted in some jurisdictions. Rushing v. Allstate Insurance Company, 216 So.2d 875 (La.Ct.App. 1968); Spencer v. Traders & General Insurance Company, 171 So.2d 723 (La. Ct.App. 1965); Shipley v. American Standard Insurance Co. of Wisconsin, 158 N.W.2d 238 (Neb. 1968). We, however, prefer to strictly construe our uninsured motorist statutes and hold that anyone who is a “person insured” within the meaning of the statutes may not be excluded from coverage by provisions in the policy of insurance.

In Allstate Insurance Company v. Meeks; 153 S.E.2d 222 (Va. 1967), the Supreme Court of Virginia considered the facts in that case in the light of their statutory provisions, and held that benefits under an uninsured motorist provision in a liability policy issued to a named insured in one motor vehicle owned by him extended to the named insured while he was operating another motor vehicle owned by him which was not covered in such liability policy. Cf. Bryant v. State Farm Mutual Ins. Co., 140 S.E.2d 817 (Va. 1965).

If our legislature had intended to prevent an owner of two motor vehicles from paying for insurance on only one and recovering benefits for his injuries sustained while operating the other, it could have followed the lead of the legislatures in some of the other jurisdictions and limited the coverage by providing that NRS 693.115(1) did not apply to bodily injury suffered by the insured while occupying a motor vehicle owned by him, unless the occupied vehicle was an insured motor vehicle. Such an amendment would be the prerogative and responsibility of the legislature and not the function of this court. See West’s Ann. Insurance Code, § 115802 as amended, 1968; Aetna Insurance Company v. Hurst, supra.

Although the object of the interpretation of an insurance policy is to determine the intent of the parties so that the contract may be given effect consistent with the parties’ real intent and purpose (Home Indem. Co. v. Desert Palace, Inc., 86 Nev. 234, 468 P.2d 19 (1970); Richfield Oil Corp. v. Harbor Ins. Co., 85 Nev. 185, 452 P.2d 462 (1969)), that determination must be made in the light of the controlling statutes. If a contract of insurance is at variance with the statutory requirement, it is against public policy and void. Under NRS 693.115(1), without exception, every automobile or motor vehicle liability policy is, unless the same is waived, required to provide coverage for the persons insured under such policy against uninsured motorists. Here, Gordon Hinkel was a “person insured” and any limitation upon his coverage was void. In accord: Bankes v. State Farm Mutual Automobile Ins. Co., 264 A.2d 197 (Pa.Super.Ct. 1970); Aetna Insurance Company v. Hurst, supra; Allstate Insurance Company v. Meeks, supra; Gulf American Fire & Casualty Company v. McNeal, 154 S.E.2d 411 (Ga.Ct.App. 1967).

The appellant was not entirely without a remedy for, within its power and pursuant to the statutory authority, it could predetermine who was to be a named insured. However, once a person was included as a “person insured,” the insurer could not exclude him from coverage.

The judgment of the district court is affirmed.

Zenoff, C. J., Thompson and Gunderson, JJ., concur.

1 The fact that on August 21, 1968, Gordon purchased a policy of liability insurance from Balboa Insurance Company on his Honda motorcycle and expressly waived uninsured motorist coverage is irrelevant to this appeal. If considered at all, it could be inferred that he believed he was covered under his father’s policy.