ATV Accident Clearly Excluded

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The Supreme Court was asked to determine if an all-terrain vehicle (“ATV”) is covered under a homeowner’s insurance policy as a “farm type vehicle.” In Erie Insurance Exchange v. Diamond Danelle Jones, An Infant, By Her Mother And Next Friend, Tracy Hardison, No. 210443, Supreme Court Of Virginia (April 14, 2022) interpreted the policy as written.

BACKGROUND

Diamond Jones was riding as a passenger on the back of an ATV. While Jones was riding, a tree branch struck and injured her. The accident did not take place on the Rekowskis’ property.

The Rekowskis were insured by a homeowner’s policy. The policy does not cover “[b]odily injury, property damage or personal injury arising out of the ownership, maintenance or use of . . . any land motor vehicle.” Vehicles are not excluded if ... they are a lawn or farm type vehicle or snowblower, wherever used or located, if not subject to motor vehicle registration…”

The circuit court concluded that the policy did cover the accident.

ANALYSIS

Courts interpret insurance policies, like other contracts, by determining the parties’ intent from the words they have used in the document.

The policy generally excludes motor vehicles from coverage, but an exception to that broad exclusion provides coverage for “a lawn or farm type vehicle or snowblower.” To read “farm type vehicle” as encompassing any vehicle that could potentially be used on a farm would create an exception so broad it would render the limits on coverage meaningless since any vehicle like a SUV or even a motorcycle could be used for farm type operations.

Therefore, the Supreme Court concluded that as a matter of law the language “lawn or farm type vehicle or snowblower” does not encompass a multi-use vehicle like an ATV.

ZALMA OPINION

Many litigants and judges try valiantly to find an ambiguity in insurance policy language to obtain defense for an insured or indemnity for an injured party. However, simply because parties differ on the meaning of the language of a policy that does not make the terms ambiguous. The ATV in this case was a land motor vehicle, it was being operated off the insured’s premises, and it was never used for any farm, lawn or snowblower functions. The clear and unambiguous language of the policy deprived the owner of liability insurance coverage under a homeowners policy.
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Barry Zalma, Esq., CFE, is available at http://www.zalma.com and [email protected].

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