Defense Digest, Vol. 30, No. 2, June 2024

Splitting the Road: Navigating Uninsured Motorist Coverage of Divorced Spouses

By
Kathleen A. Carlson

Key Points:

  • In Florida, a divorced or separated spouse of an auto insurance policyholder may be entitled to uninsured or underinsured motorist (UM) benefits under their former spouse’s auto policy. 
  • The issue arises when the spouses divorce (or separate) and establish separate residences but do not remove the divorced or separated person from the policy. 
  • Result will be heavily dependent on the facts and terms of the policy.

Is the divorced or separated spouse of an auto insurance policyholder entitled to uninsured or underinsured motorist (UM) benefits under their former spouse’s auto policy? Surprisingly, maybe.

Often an insurance policy issued to married spouses will list a single individual as the named insured and the other spouse as another insured or operator. An issue arises when the spouses divorce (or separate) and establish separate residences but that person is not removed from the policy. Certainly, the carrier did not intend for one personal auto policy to apply to multiple households. The policyholder is likely not even aware of the potential consequence.

When separation or divorce is not reported to the carrier, the carrier has no way of independently knowing. As a result, insurers may continue affording UM coverage to the divorced spouse, believing they are still a member of the policyholder’s household. The carrier’s first notice of the divorce/separation may not even occur until the case is in suit and discovery is underway.

Availability of UM coverage for the divorced or separated spouse is heavily dependent on facts and the terms of the policy. So, it is important to determine if the individuals and autos are covered.

Outside of the named insured policyholder, for example, UM coverage may be afforded to a permissive user, resident relative, or household member. This policy language is important, as it is possible for a divorced or separated spouse to be considered a household member of the policyholder. This is because exclusory policy terms, such as “resident relative” or “household member,” must be construed as liberally as could reasonably be permitted under common use to give effect to the intentions of the parties and the purposes of insurance. Row v. United Services Auto. Ass’n, 474 So. 2d 348, 349 (Fla. 1st DCA 1985). 

The test to determine if an individual is a member of the household is physical absence with no intent to return to the household. Sanders v. Wausau Underwriters Ins. Co., 392 So. 2d 343, 344 (Fla. 5th DCA 1981). Most of the Florida case law applying this residency/intent test is in the context of adult children and children of divorced parents, but is it easy to see the parallels if applied to a separated spouse? In American Security Insurance Co. v. Van Hoose, 416 So. 2d 1273 (Fla. 5th DCA 1982), the court held that a father and daughter were not members of the same household, even though the father provided a substantial amount of financial support to the daughter, but she lived in a different home. Importantly, the court recognized that a joint-household is not established just because one household is dependent on the other for support. 

Outside of Florida, the same residency/intent standard has been applied to separated and divorced spouses. Although other state law is not binding on Florida, the out-of-state courts’ analyses demonstrate that the common theme throughout the case law concerning divorced spouses turns on residency and the parties' intent to return to the relationship/household.

In some states, it is well-established law that a divorced spouse who does not reside with the policyholder is not a member of the policyholding spouse’s household. See, e.g., Crews v. Allstate Ins. Co., 373 S.E.2d 782 (Ga. App. 1998); Johnson v. Payne, 549 N.E. 2d 48 (Ind. App. 1 Dist. 1990). Similarly, in cases where the spouses are separated and not yet legally divorced, courts in many states consider the physical residency and the status of the relationship. See, e.g., Ledet v. Leighton, 736 So.2d 854 (La. Ct. App. 3d Cir. 1999); United Services Auto. Ass’n v. Akers, 729 P.2d 495 (Nev. 1986); Wall v. Heritage Mut. Ins. Co., 446 N.W.2d 75 (Wis. Ct. App. 1989); GEICO Casualty Company v. Collins, 371 P.3d 729 (Colo. App. 2016). 

However, even if the former spouse is not a household member, there is still the potential for coverage under the policy depending on the vehicle occupied when the loss occurred. If the vehicle is listed on the policy, coverage may extend to the divorced spouse as a permissive user of the vehicle. In this instance, it is important for the carrier to determine if the vehicle garaging and residential information is accurate. 

If a divorced spouse who resides outside of the policyholder’s home owns the vehicle and that vehicle is not listed on the policy, there may not be coverage to the divorced spouse. Similarly, if a divorced/separated spouse is traveling in a ride-share vehicle, like Uber or Lyft, it may be excluded by a covered or owned auto provision. 

These situations are heavily dependent on specific facts and policy language. This issue can be easily overlooked. Once the carrier learns the former spouse is divorced from the policyholder, the carrier should gather the facts to evaluate the situation and potentially seek judicial clarification on the matter through a declaratory action or other appropriate filing.

*Kathleen works in our Jacksonville, Florida, office. 

 

Defense Digest, Vol. 30, No. 2, June 2024, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2024 Marshall Dennehey. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.