Auto policy reformed regarding Family Exclusion
In Allstate v. Moser, Moser was injured in a one car accident. Moser was a passenger, and her brother was driving. Allstate’s policy was issued in Colorado to Moser’s parents . It had $100,000 limits and contained a family exclusion. There was an accident in Kansas. Kansas had a compulsory insurance law which required that all policies provide at least $25,000 per person, up to $50,000 per accident. Allstate’s policy also provided that when the vehicle was operated in other states, the policy would comply with the liability insurance requirements in those states. Moser also had an umbrella policy which provided coverage in excess of $100,000 when the primary policy limits were exhausted. When Moser sued, Allstate filed a declaratory judgment action. In that action, it was determined that Allstate’s liability under the policy was limited to the minimum requirements under Kansas law – $25,000.
On appeal, the issue was whether Allstate’s liability was limited to $25,000 or whether the entire policy limit was available to Moser. The Tenth Circuit affirmed the trial court’s ruling that limited Allstate’s liability to $25,000. Because $25,000 was less than the policy limits, the underlying policy was not exhausted, and therefore the umbrella policy did not apply.
