What do you think about this one? The California Supreme Court is presently
attempting to decide whether or not a homeowner’s insurance policy should cover
a sixteen-year-old’s accidental shooting of his best friend which yielded an
involuntary manslaughter conviction.
There are two somewhat contrary clauses in the insurance policy that are
causing the problem. On the one hand,
the insurance policy specifically guarantees coverage for negligent acts. On the other hand, the insurance company
indicates it does not cover illegal acts.
So what do you do if you have a negligent but illegal act? At the oral argument, the Judges expressed
concern over the term “illegal acts.”
The Justices indicated that if an illegal act is deemed to be anything
that violates the law, then the policy of insurance would have absolutely no
benefit if one did something tht was illegal but unintentional.
Most insurance companies do not use the term “illegal
acts,” but rather exclude coverage for “criminal acts.” The Justices seemed to indicate that they
far preferred that clause to the one that Safeco, the writer of the homeowner’s
policy, used in this matter.
Kelly Smith accidentally shot his friend with a
handgun he found in his father’s jacket.
The family of the deceased filed a wrongful death suit against the Smith
family. Safeco, initially agreed to
defend and indemnify the Smith family, but later changed its mind. The Smith family challenged this refusal to
defend in Superior Court, and the trial court judge agreed that Safeco had to
defend and indemnify.
This ruling was reversed by the Court of Appeal,
which held that as involuntary manslaughter is an illegal act, it is therefore
not something that reasonably could be contemplated to be covered by an
insurance policy.
One of the Justices on the State Supreme Court who is
concerned about the vagueness and broadness of what is or is not an illegal
act, indicated her belief that an insurance company could use this clause to
get them out from covering losses from a house that burns down if the owner did
not comply with the law requiring smoke detectors.
I agree that the “illegal acts” clause is too
broad. If I am driving in the rain and
lose control of my car, and I go through a stop sign and collide with you, is
my insurance company going to argue that I committed an illegal act by going
through the stop sign and that therefore they should not have to cover me?
Every once in a while I’ll see a policy or get
something in the mail that offers me insurance for “accidental death
or dismemberment.” I always wonder what
that’s about, and I often end up
deciding that the dismemberment perhaps sounds worse than the alternative. Here you have a truly accidental death. Kelly Smith accidently shot his best
friend. The criminal justice system
decided he had to take some responsibility for the accident, and he was
convicted of involuntary manslaughter.
I hope the Court rules against Safeco. I would decide that the clause that
indicates coverage for negligent acts takes priority in this case. Protection from losses due to negligent acts
is why we buy insurance. If you and I
get into a car accident, my auto insurance will cover me. If, on the other hand, I intentionally
attempt to ram you with my car, that intentional act takes away the insurance
company’s obligation to cover me. There
has always been a distinction in the law that holds that intentional torts free
an insurance company from its obligation to indemnify, and I think that is
appropriate. An insurance company
cannot predict nor should it have to insure against a deliberate act on the
part of an individual; however, an accidental act is what insurance is all
about, from auto insurance to homeowner’s insurance to any other type of
insurance policy that can be sold.
The role of the courts is to follow the law, do the
right thing, and hope that what they do yields appropriate behavior in the
future. Hopefully, the California State
Supreme Court will send Safeco a message, so that in the future, they will
change the way they word their policies.