We have an insured who has a personal auto policy written on ISO form PP 00 01 04 86. Our insured was involved in an auto accident where she was clearly the at-fault party. We paid for the property damage to the other vehicle, as well as for the loss of use claim. We were also presented with a claim for veterinary charges since the other party's dog was badly injured in the accident. We denied payment to the other party for the dog as we feel there is no coverage for such expenses due to the following exclusion: "we do not provide liability coverage for any person for damage to property owned or being transported by that person." Now we are having second thoughts about the denial. What is your opinion?

New York Subscriber

We believe that your company has misinterpreted the exclusion on the auto policy and that there should be coverage for the injuries to the dog.

The exclusion reads that the insurer will not provide liability coverage for any person for property damage to property owned or being transported by "that" person. The intent of the exclusion is not to provide liability coverage for the person who is transporting or who owns the property that is damaged. In this case, your insured was not transporting and did not own the dog and so, the exclusion is not applicable for the insured who is, after all, responsible for the damage. An innocent third party had his property damaged and the fact that he was transporting his own property or owned that property does not change your insured's liability or the insured's coverage under the auto policy.

Note that the current version of the personal auto policy takes the confusion that could arise from the 04 86 version into account. The words "any person" have been changed to "any insured." So, we believe that the exclusion was meant to apply all along to the insured and not an innocent third party, especially one who was damaged through the liability of the insured. It is our opinion that the damage to the dog should be covered.

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