State Farm Mut. Auto. Ins. Co. v. Kelty, 2015 Del. LEXIS 550 (Del. Oct. 20, 2015)

Automobile insurance policies providing excess coverage for insureds and their relatives who live with them do not violate Delaware’s mandatory-minimum coverage statute or public policy.

The plaintiff was helping his father-in-law trim branches on his in-laws’ property. The father-in-law improperly used his automobile in the course of their work together, causing the plaintiff to sustain injuries. The father-in-law’s automobile insurer refused to provide personal injury protection coverage in excess of the $15,000 statutory minimum pursuant to Del. Code Ann. tit. 21, § 2118. The plaintiff’s in-laws had $100,000 in additional PIP coverage, but this additional coverage only applied to their family and any relatives living primarily with them. The question before the Delaware Supreme Court was whether the plaintiff was entitled to PIP coverage in excess of the mandatory minimum coverage of $15,000. On appeal, the plaintiff conceded that he did not meet the definition of “relative” in the policy, but he argued that this $15,000 limitation violated public policy. The court found the mandatory-minimum coverage language in the statute to be unambiguous and, therefore, stated it would be an error to interject their view of Delaware’s public policy when the General Assembly had made their intentions clear. The court also ruled that the lower court erred in determining that insurers are not entitled to distinguish among beneficiaries based on relationship status, as it would be contrary to the language of the statute.

Case Law Alerts, 1st Quarter, January 2016

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