Employers Mutual Casualty Co. v. McKeon, 159 Ariz. 111

Summary

The Supreme Court of Arizona held that a named driver exclusion could validly eliminate nonmandatory medical-payments coverage but could not exclude mandatory uninsured motorist coverage. The court further held that the insured was entitled to the uninsured motorist limits actually purchased, rather than only the statutory minimum, and affirmed the judgment regarding uninsured motorist coverage while reversing the judgment concerning medical payments.

Holdings

1. The endorsement unambiguously excluded Jay McKeon from all policy coverage while he was driving, including nonmandatory medical-payments coverage.
2. A named-driver exclusion that purports to eliminate mandatory uninsured motorist coverage is contrary to Arizona public policy and void.
3. Jay McKeon's uninsured motorist coverage was not limited to the statutory minimum; it extended to the higher limits the insureds actually purchased, up to the policy's liability limits.

Questions Presented

1. Whether the named-driver endorsement excluded only liability coverage or clearly excluded all policy coverage while Jay McKeon was driving.
2. Whether Arizona's mandatory uninsured motorist statute, A.R.S. § 20-259.01, permitted the contractual exclusion of Jay from uninsured motorist coverage.
3. If the exclusion was invalid as to uninsured motorist coverage, whether Jay was limited to the statutory minimum coverage rather than the higher limits purchased under the policy.

Disposition

other