|
|
Publications
'Step Down' Provision Is Sufficiently 'Conspicuous, Plain and Clear'
Insurance Law Update
May 2010
By:
John Na
In Dominguez v. Financial Indem. Co., 183 Cal.App.4th. 388 (March 30, 2010), the California Court of Appeal, First District, affirmed the trial court's ruling and enforced a provision in an automobile policy limiting the amount of coverage available for permissive users. At issue was the enforceability of the policy's "step-down" provision, which reduced the amount of bodily injury liability limits from $100,000/$300,000 to the statutory minimum of $15,000/$30,000 in the event the vehicle was driven by a permissive user. The plaintiff, who was injured in an accident with the insured vehicle driven by a permissive user, brought a declaratory relief action seeking to obtain the higher limits of coverage available under the policy.
The Court of Appeal held that the "step-down" provision in the policy was "conspicuous, plain and clear" and affirmed the trial court's ruling. In reaching its decision, the court found that the provision was explicitly set forth in the policy and not hidden in an inconspicuous portion of the policy. The court also found that the provision explicitly alerted the insured to the limitations imposed by its reduction of coverage. The court rejected the plaintiff's argument that the provision was ambiguous because the term "permissive user" was not defined in the policy, noting that a reasonable insured was not likely to conclude that anyone operating the vehicle, other than the insured (and his relative), would be provided coverage in excess of the reduced amount.
|
Related People
Related Offices
Related Practices
|