Jeffrey P. Gale, P.A. // Interesting Florida Motor Vehicle Insurance Policy Tidbits

Unless otherwise prohibited by law, the terms of a Florida motor vehicle insurance policy govern the rights and obligations of the parties—the insurance carrier and the insureds.

Florida’s Dangerous Instrumentality Doctrine is a long-standing legal principle that makes the owner of a motor vehicle vicariously liable for injuries caused by someone else driving that vehicle with the owner’s knowledge and consent. In other words, If you own a vehicle and give another person permission—express or implied—to drive it, you are liable for any negligence that driver commits while operating the vehicle. The doctrine comes from common law, not statute. Florida first adopted it in Southern Cotton Oil Co. v. Anderson (1920), reasoning that automobiles are inherently dangerous when operated and therefore owners must be held responsible for their use.

Premium charges for Florida motor vehicle insurance policies are primarily risk-based—meaning insurers calculate how likely a claim will be filed against the policyholder and how costly that claim might be. The higher the risk, the higher the premium. One factor that affects the level of risk to the insurer under a motor vehicle policy is the number of individuals who are authorized to drive the vehicle, such as individuals living in the same household.

During the insurance application process, applicants are required to disclose all household members, particularly those of driving age. Providing false or incomplete information in response to this question may give the carrier grounds to deny coverage in the event of an accident. One way policyholders can help manage their premium levels is by designating certain household members as excluded drivers under the policy.

When a driver is specifically listed as an “excluded driver” on an automobile insurance policy, that exclusion is very strong. Here’s how it works:

• No coverage for the excluded driver: If the excluded person is operating the vehicle and causes a crash, the insurer will deny liability coverage for that driver. That means the policy does not step in to defend or indemnify the excluded driver.
• Coverage for the named insured/owner: If the vehicle owner (who is the policyholder) is sued under a theory of vicarious liability (for example, because Florida law generally makes owners liable for the negligence of permissive drivers under the dangerous instrumentality doctrine), the outcome depends on how the exclusion is written:
  • Many Florida policies expressly exclude not just the driver, but also any liability imputed to the owner arising from that driver’s negligence. In those cases, the insurer will deny coverage both for the excluded driver and the owner.
  • However, if the exclusion is worded narrowly (excluding only the driver’s liability, not the owner’s vicarious liability), the owner may still be covered for lawsuits brought against them, even though the driver is excluded.

Our firm recently encountered such an issue. Our client was injured in a crash caused by another driver’s negligence. It was later revealed that the driver had been designated as an excluded operator under the vehicle owner’s insurance policy. Accordingly, we requested a copy of the owner’s policy for review.

Unfortunately, the policy stated in clear and unambiguous terms that the exclusion “includes any claim or suit for damages made against you, a relative, a rated resident, or any other person or organization that is vicariously liable for an accident arising out of the operation of a motor vehicle by the excluded driver.”

To make matters worse, neither the driver nor the vehicle’s owner has sufficient personal assets to cover our client’s losses. We confirmed this after conducting an asset search.

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Contact us toll free at 866-785-GALE or by email (jgale@jeffgalelaw.com) for a free, confidential consultation to learn your legal rights.

Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.

While prompt resolution of your legal matter is our goal, our approach is fundamentally different. Our clients are “people” and not “cases” or “files.” We take the time to build a relationship with our clients, realizing that only through meaningful interaction can we best serve their needs. In this manner, we have been able to best help those requiring legal representation.