In this case, Gilda Menendez allowed her granddaughter, Fabiola, to use a vehicle insured by State Farm.  Ms. Menendez and her granddaughter’s parents were passengers in the car while Fabiola was driving.  Fabiola negligently operated the vehicle and caused an accident resulting in injuries to everyone.  At the time of the accident, Fabiola lived in her parents’ home and Ms. Menendez lived at a separate address.

State Farm considered Fabiola an “insured” under the policy because she had permission to operate her grandmother’s vehicle.  However, State Farm denied her parents’ bodily injury claims because of a “household exclusion” provision.  The provision excluded “any insured or any member of an insured’s family residing in the insured’s household.”  State Farm concluded that the parents were members of their daughter’s “household” and not eligible for bodily injury coverage under the policy.

The parents filed suit.  The parents asserted that “the insured” refers to the “named insured”, Ms. Menendez, and does not include permissive users of the vehicle like Fabiola.  Further, since they did not reside in Ms. Menendez’ household the exclusion was not applicable to them.  The trial court agreed that “the insured” was ambiguous and not enforceable and decided in favor of the parents.  State Farm appealed to the 3^rd District Court of Appeals (3^rd DCA).  The appellate court also found that the language of the household exclusion was ambiguous and should be construed against State Farm and in favor of the parents.

To read the decision:

http://www.3dca.flcourts.org/Opinions/3D08-2969.pdf