Wade Clark Mulcahy LLP

<p style="text-align: justify;">In <em><a href="https://www.wcmlaw.com/wp-content/uploads/2021/02/Giselle-Polizzi-v.-Liberty-Mutual-Fire-Insurance-Company.pdf">Giselle Polizzi v. Liberty Mutual Fire Insurance Company</a>,</em> the United States District Court for the District of New Jersey case gave a lesson in policy interpretation following a dispute over an automobile policy. In this case, Giselle Polizzi (“Polizzi”) was injured in a car accident with an underinsured motorist while borrowing her parents’ vehicle. Due to language in an endorsement within the policy, Polizzi was not able to claim the full policy limits for an accident with an underinsured motorist (“UIM”).</p>
<p style="text-align: justify;">In this matter, Polizzi was listed as a driver on the declaration page of her parents’ insurance policy but was not listed as a named insured.  The policy included an endorsement (“step-down provision”), which stated the UIM limit would be decreased if the insured is not a named insured or a family member as defined by the policy.  The policy defined family member as “a person related to you by blood, marriage or adoption who is a resident of your household.”  Following the accident, Polizzi learned the other driver had a bodily injury insurance limit of only $100,000. Thus, she alerted Liberty Mutual that she would make a UIM benefits claim under the policy issued to her parents. At the time of the incident, Polizzi did not live with her parents. Thus, the step-down provision came into effect.  Eventually, both parties filed motions for summary judgment.</p>
<p style="text-align: justify;">The issue before the Court was whether the step-down endorsement was applicable to Polizzi’s claim, thereby reducing any UIM benefits to the full available policy limit of the other driver. Thus, there was nothing to be recovered from Liberty Mutual.  The Court reasoned that in instances of claimed ambiguities within an insurance policy, it must assess the “reasonable expectations” of the policyholder. The Court, however, found the section at issue to be clear and unambiguous. Thus, the reasonable expectations doctrine did not apply. The policy included several references to the endorsement, including the language “THIS ENDORSEMENT CHANGES THE POLICY”. Thus, the Court found Liberty Mutual produced sufficient evidence to demonstrate the endorsement applies in this case and summary judgment was granting dismissing Polizzi’s case.  The rationale of the Court confirmed that torturing policy language would not be permitted by the claimant.</p>
Thanks to Gabi Outlaw for her contribution to this article.  Should you have any questions, kindly contact <a href="mailto:tbracken@wcmlaw.com">Thomas Bracken</a>.