In common with homeowners policies in general, a policy contained the following severability of insurance condition under Section II Liability Coverages: "This insurance applies separately to each insured...." Husband and wife and their minor son were insureds in the policy.

Section II insurance provided by the policy also included exclusions for injury arising out of: "(1) the use of a motor vehicle owned or operated by an insured; (2) entrustment of a motor vehicle to any person by an insured; (3) statutorily imposed vicarious parental liability for actions of a child or minor using a motor vehicle."

Two passengers were killed in an accident involving a car owned and operated by the son. Representatives of their estates sued the boy's parents, alleging that they were negligent in their parental control and supervision and, accordingly, liable under Michigan statutes for the manner in which the car was operated. The parents brought an action, in which they were joined by the estate representatives, against their homeowners insurer when it declined to defend or indemnify them on the basis of the motor vehicle exclusions. They appealed a trial court determination that the exclusions were applicable.

On appeal, the parents argued that, by virtue of the severability clause in the policy, pertinent exclusions did not apply to them. They contended that policy exclusions applied "only to the particular insured seeking coverage." They claimed coverage and said that the exclusions did not apply because they, not their son, invoked the protection of their policy and did not own or operate the car.

The appeal court rejected the argument. It said that the motor vehicle exclusions would be effective with respect to claim against the son (if one were made). The parents had no coverage because their claim was "wholly derivative" of their son's claim, which would be excluded under the policy. The court cited its holdings in earlier cases in concluding that "....we must look to the underlying cause of the injury to determine coverage and not the theory of liability."

The judgment of the trial court was affirmed in favor of the insurer and against the insureds.

(GORZEN ET AL, Plaintiffs-Appellants v. THE WESTFIELD INS. CO. ET AL, Defendants-Appellees. Michigan Court of Appeals. No. 92-63572. Nov. 15, 1994. CCH 1995 Fire and Casualty Cases, Paragraph 5096.)

In common with homeowners policies in general, a policy contained the following severability of insurance condition under Section II Liability Coverages: "This insurance applies separately to each insured...." Husband and wife and their minor son were insureds in the policy.

Section II insurance provided by the policy also included exclusions for injury arising out of: "(1) the use of a motor vehicle owned or operated by an insured; (2) entrustment of a motor vehicle to any person by an insured; (3) statutorily imposed vicarious parental liability for actions of a child or minor using a motor vehicle."

Two passengers were killed in an accident involving a car owned and operated by the son. Representatives of their estates sued the boy's parents, alleging that they were negligent in their parental control and supervision and, accordingly, liable under Michigan statutes for the manner in which the car was operated. The parents brought an action, in which they were joined by the estate representatives, against their homeowners insurer when it declined to defend or indemnify them on the basis of the motor vehicle exclusions. They appealed a trial court determination that the exclusions were applicable.

On appeal, the parents argued that, by virtue of the severability clause in the policy, pertinent exclusions did not apply to them. They contended that policy exclusions applied "only to the particular insured seeking coverage." They claimed coverage and said that the exclusions did not apply because they, not their son, invoked the protection of their policy and did not own or operate the car.

The appeal court rejected the argument. It said that the motor vehicle exclusions would be effective with respect to claim against the son (if one were made). The parents had no coverage because their claim was "wholly derivative" of their son's claim, which would be excluded under the policy. The court cited its holdings in earlier cases in concluding that "....we must look to the underlying cause of the injury to determine coverage and not the theory of liability."

The judgment of the trial court was affirmed in favor of the insurer and against the insureds.

(GORZEN ET AL, Plaintiffs-Appellants v. THE WESTFIELD INS. CO. ET AL, Defendants-Appellees. Michigan Court of Appeals. No. 92-63572. Nov. 15, 1994. CCH 1995 Fire and Casualty Cases, Paragraph 5096.)