EXCLUSION FOR LOSSES WHEN DRIVER UNLICENSED IS ENFORCED

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Great West sued Gates for damages resulting from the collision. Shortly thereafter Founders sued for Declaratory Judgment seeking a declaration that it was not obligated to provide insurance coverage for Gates, pursuant to an exclusion in the Policy, because Gates had been driving without a valid driver’s license at the time of the collision.

The trial court entered summary judgment in favor of Founders and directed the entry of final. Great West appealed.

Discussion and Decision

The interpretation of an insurance policy is primarily a question of law for the court, and it is therefore a question which is particularly suited for summary judgment. Clear and unambiguous policy language must be given its ordinary meaning.

The policy exclusion provided that: “No coverage is afforded under any Part of this policy if, at the time of the accident, your insured car or a temporary substitute car is being operated by a person who: a. Is not a licensed driver...…”

Gates was driving without a valid driver’s license on the date of the collision. The trial court concluded that, by the plain terms of the Policy, insurance coverage was excluded.

It is uncontested that at the time Gates tendered his August premium the Policy remained in full force and effect. Founders did not contend otherwise.

The right of a third party to recover through liability insurance is not absolute.

The Court of Appeal concluded that Founders was entitled to judgment as a matter of law, and there is no genuine dispute of material fact.

ZALMA OPINION

Insurance policies are contracts. The terms and conditions of the policy, if unambiguous, must be applied as written. Since Gates was unlicensed at the time of the accident the clear and unambiguous language of the policy excluded coverage. The injured party, therefore, has no rights against Gates’ insurer. They can, of course, get a judgment against Gates and collect from his assets. An injured party has no right to recover from the tortfeasor’s insurer. The tortfeasor only has the opportunity to do so if the policy provides insurance coverage for the injuries claimed.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

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