Summary: The personal auto policy (PAP) uses the terms "auto" and "motor vehicle" in various sections of the contract. Since the terms are not always clearly defined in the PAP, they are vague enough to open the door to legal challenges; for example, coverage has been found for dune buggies, motorcycles, mopeds, and golf carts under the auto policy. This discussion focuses on different court interpretations as to what constitutes an "auto" or "motor vehicle," with particular reference to the liability and uninsured motorists portions of the personal auto contract.

Topics covered:

Liability coverage for autos

Uninsured motorists coverage

Motorcycles as motor vehicles

Liability Coverage for Autos

In the personal auto policy (references are to the 01 05 edition) definitions, "your covered auto" means "any vehicle shown in the declarations," a ″newly acquired auto,″ any trailer owned by the named insured, or any auto or trailer the named insured does not own while being used as a temporary substitute for a covered auto. A ″newly acquired auto″ can be a private passenger auto, or a pickup or van for which no other insurance policy provides coverage. There are restrictions on a pickup or van: it must have a gross vehicle weight rating of 10,000 pounds or less (gross vehicle weight ratings take into account the base curb weight of the vehicle plus the weight of any optional accessories, cargo and passengers), and not used for delivery or transportation of goods and materials unless this use is incidental to the named insured's business of installing, maintaining or repairing furnishings or equipment (an example would be a self-employed carpenter), or for farming or ranching.

 The liability portion of the policy provides coverage for the named insured (or any family member) for the ownership, maintenance, or use of "any auto," but adds that there will be no coverage for "any vehicle which has fewer than four wheels; or is designed mainly for use off public roads" (exclusion B.1.). Part C, uninsured motorists coverage, describes an uninsured motor vehicle as "a land motor vehicle of any type," but does not include "any vehicle or equipment… designed mainly for use off public roads while not on public roads."

These phrases show that "auto" and "motor vehicle" (or vehicle) are used interchangeably throughout the personal auto policy. This is because most people would consider an auto to be a motor vehicle, and a vehicle discussed in a personal auto policy to be an auto. However, when it comes to having insurance to pay for a liability claim against the insured, disputes can arise over just what an auto or a motor vehicle is. See the following court cases as examples. (Although many of the cases in this article are over twenty years old, they are still valid as case law.)

 The lack of liability coverage for an insured's use of any vehicle designed primarily for off-road usage is a basic precept of the auto policy. But, what does the term "vehicle" include? Is it just another word for an auto? And, even if that is so, what does the term "auto" include? A rented golf cart was found to be a covered auto for liability purposes in Fireman's Fund Insurance Company v. Pearl, 540 So. 2d 883 (Fla. App. 1989). The policy provided that liability coverage applied to the insured's use of "any auto or trailer" and for any "auto" accident. The court rejected the insurer's argument that the policy was not ambiguous because a golf cart is not ordinarily thought of as an automobile. Since there was no other definition of the term "auto" in the policy, and since the policy had an exclusion of coverage for vehicles with fewer than four wheels, the court found the policy ambiguously implied that four-wheeled vehicles were covered. Therefore, the term "auto" was potentially misleading, and so, coverage applied. (Of course, the current PAP provides liability coverage for the use of any nonowned golf cart, so there is no longer any reason for this issue to be in doubt. See the exception to exclusion B.1. We should add that the ISO homeowners forms also provide liability coverage for the use of a golf cart (the earlier form restricted use while on the golf course, but the more current forms—2000 and 2011—have expanded coverage).

 Although the policy excludes liability coverage for a vehicle designed mainly for use off public roads, a dune buggy that the named insured acquired two weeks before an accident qualified as an "automobile" within the scope of the automatic coverage clause in Economy Fire & Casualty Company v. Stevens, 426 N.E.2d 321 (Ill. App. 1981). Testimony revealed that the vehicle, a modified Volkswagen, was unlicensed, and did not have a speedometer, windshield, headlights, or taillights. The insured did not intend the vehicle to be used either for farming or on public roads. Nonetheless, the Illinois appellate court held that the dune buggy was an automobile because it could have been made licensable for use on public roads with only a few "cosmetic changes."

 The Illinois court chose not to follow a Florida court of appeals case, Martin v. Nationwide Mutual Fire Insurance Company, 235 So. 2d 14 (Fla. App. 1970), that held against coverage under circumstances that were very similar to those of the Stevens case. In the Florida case, the insured built a ″jeep″ from the ground up using various auto parts. The vehicle was never intended for use on public roads. He traded it for a truck, and within eight days was involved in an at-fault accident. The court ruled that the ″jeep″ was not a covered auto because of the exclusion for vehicles designed mainly for off-road usage. Therefore, the vehicle replacing it could not qualify for liability coverage as a newly acquired auto.

 Of course, definitive policy language may help interpret the policy's terms. As an example, the policy language was considered to be clear in precluding liability coverage for a dune buggy in Atkinson v. Allstate Insurance Company, 354 S.E.2d 866 (Ga. App. 1987). The insured's son, covered under the policy for permissive use of a non-owned automobile, was operating a non-owned dune buggy at the time of the accident. The policy defined auto as a "land motor vehicle designed for use principally upon public roads." The dune buggy's owner had converted a Volkswagen into a dune buggy. Although the vehicle was driven on public roads, it was primarily used in the woods. The Georgia court of appeals upheld the lower court's finding that the dune buggy was not a covered automobile.

 Uninsured Motorists Coverage and PIP

 The personal auto policy promises to pay compensatory damages for bodily injury which an insured is legally entitled to collect from the owner or operator of an uninsured motor vehicle. For purposes of this discussion, the vehicle must not be one designed mainly for use off public roads while not on public roads; the policy drafters recognize that even vehicles intended for off-roads usage occasionally will venture onto public roads.

 Determining uninsured motorists coverage for accidents can require judicial interpretations just as does determining liability coverage. This is especially true if a state law can be brought into play. For example, recreational vehicles, such as dune buggies, will not be afforded uninsured motorists coverage unless the accident happens on public roads, according to the definition of uninsured motor vehicle on the PAP. However, is there coverage if the state law is such that a dune buggy can be considered to be a motor vehicle? A Kansas appeals court, in Schumaker v. Farm Bureau Mutual Insurance Company, 785 P.2d 180 (Kan. App. 1990), ruled that a dune buggy operated on private property was not a motor vehicle for personal injury protection (PIP) and uninsured motorists coverage. The insured was riding in his friend's uninsured, unregistered dune buggy at the time of the accident. The dune buggy had no doors, sides, or top, brake lights, turn signals, windshield, odometer, speedometer, horn, hood, or gas gauge. It did have roll bars, head and taillights, brakes, seat belts, and street tires. It had been driven periodically about three blocks from the owner's home to the pasture where the accident occurred, but it was never driven to work or used for anything other than off-road recreation.

 The insured's policy required that the vehicle be a land motor vehicle of a kind required to be registered for PIP benefits to apply. The uninsured motorists portion of the policy excluded coverage for any accident involving any vehicle "designed mainly for use off public roads while not on public roads" (language identical to the current provision under the PAP).

 The insured argued that the dune buggy was a motor vehicle under a Kansas statute defining a vehicle as a device in which a person is or may be transported on a public roadway. In rejecting the applicability of the statutory provision, the court referred to an Arizona appeals court decision construing a no-fault statute and uninsured motorist law similar to the Kansas statutes. The Arizona case, Chase v. State Farm Mutual Automobile Insurance Company, 641 P.2d 1305 (Ariz. App. 1982), held that auto insurance does not cover injuries caused by a vehicle designed mainly for off-road use (in this instance, a golf cart) while actually being used off-road. The Arizona court found, and the Kansas court agreed, that where a law neither requires nor prohibits coverage, the exclusion for off-road accidents is a matter of contract between the insured and the insurer.

 According to Couch on Insurance §123:21, ″It must initially be recognized that any coverage referring to 'motor vehicles' refers only to vehicles as defined in the Uninsured/Underinsured Motorist or Financial Responsibility Act of a particular jurisdiction. If the specific vehicle at issue is not provided for in the statute, an accident involving that vehicle will not trigger UM/UIM coverage. Pursuant to this understanding, more recent statutes have been drafted in such a fashion as to specifically include and exclude particular types of vehicles. Further, the UM/UIM statutes often cross reference other statutes that contain specific definitions of these terms. Under most circumstances, this has eliminated the disputes that previously developed as to the use of the words 'automobile' or 'motor vehicle.'"

 To demonstrate the importance state statutes play in determining coverage, we look at Rivera v. Liberty Mutual Fire Ins. Co., 44 A.3d 498 (NH 2012). Here, the insured was injured in a single-car accident when her passenger grabbed the steering wheel of her car, causing it to veer off the road and into a tree. The court ruled that the act of grabbing the wheel made the passenger an insured (he was using the vehicle). Rivera looked to the passenger's liability insurer, which denied her claim since the passenger was not a permissive user (he was later convicted of assault with a deadly weapon). She then looked to her own policy—first the liability coverage, and then the uninsured motorist coverage. Because the passenger was an insured, though not a permissive user, there was no liability coverage for him under Rivera's policy. The uninsured motorist coverage, however, was a matter of dispute. The auto policy excludes any vehicle owned by or furnished to or available for the regular use of the named insured or any family member. But, uninsured motorist coverage applies when the liability insurer denies coverage. Liberty Mutual had denied liability coverage for the passenger. The determining factor, however, for the court was the New Hampshire statute requiring uninsured motorist coverage be included in all auto liability policies. The court stated ″The purpose of requiring uninsured motorist coverage is to close a gap in the protection afforded the public… to ensure that those who have purchased automobile insurance whose losses would otherwise go uncompensated, either because the tortfeasor lacked liability coverage or because the tortfeasor's identity was unknown, can receive compensation for their injuries." Further, ″although it was [the passenger's] improper 'use' of the vehicle that caused that accident, the undisputed facts make it clear that Rivera was an authorized operator of the vehicle at the time of the accident. Thus, she clearly falls within the policy's liability coverage. That being the case, RSA 264:15, I, requires that she be afforded UM coverage regardless of any policy exclusions to the contrary."

 The second case we review is Charida v. Allstate Indemnity Co., 259 S.W.3d 870 (Tex. Ct. of Appeals, 2008). Amal Charida was a passenger in her father's car when he had an at-fault accident. She sued her father for her injuries. Under Texas law, she was entitled to $20,000 in liability compensation after the family exclusion under the policy was applied. This was not enough to reimburse her for her injuries. She then looked to uninsured/underinsured motorist coverage. The same definition of ″uninsured motor vehicle″ that came into play in the Rivera case was applied in this case; that is, that an uninsured motor vehicle does not include a vehicle owed by or furnished or available for the regular use of the named insured or any family member. Similarly to Rivera, the appellant contended that the exclusion in the definition was invalid and unenforceable under the Texas insurance code under the circumstances of this case because it contravened public policy. Texas, like New Hampshire, mandates that no auto liability insurance policy can be issued without uninsured/underinsured motorist coverage. Charida had received $20,000 in liability compensation, and so she argued that she was therefore entitled to underinsured compensation. Like the court's summation in Rivera, she argued that without this compensation she would be deprived of the protection that UM/UIM was supposed to provide. But unlike the outcome of Rivera, here the court looked to other Texas cases and agreed with the principle that ″the purpose of [the UM/UIM statute] is to protect the insured, his family, and guests from the 'negligence of others' and that 'negligence of others' refers to negligence of strangers to the policy holder, not to members of the policy holder's family." Therefore, the exclusionary language in the definition was upheld.

 Motorcycles as Motor Vehicles

 Owned, but uninsured, motorcycles have been the focus of several court cases. The issue from these cases was whether a motorcycle was, in fact, a motor vehicle. Some court cases hold that an owned but uninsured motorcycle is a motor vehicle for purposes of excluding UM coverage, since the current PAP uninsured motorist exclusion provides no coverage for bodily injury sustained arising out of the ownership, maintenance, or use of an uninsured motor vehicle owned by or furnished to or available for the regular use of the named insured or any family member. Of course, note that some courts now are invalidating the owned but not insured exclusion under the UM coverage due to the idea that such exclusions are contrary to public policy and state law. For an example, see DeHerrera v. Sentry Insurance Company, 30 P.3d 167 (Colo. 2001) or Stoddard v. Citizens Ins. Co. of America, 643 N.W.2d 265 (Mich. App. 2002).

 As for the cases upholding the exclusion by finding that a motorcycle is a motor vehicle, the Minnesota supreme court found in Hanson v. American Mutual Insurance Company, 417 N.W.2d 94 (Minn. 1987), that a state law precluded uninsured motorists coverage where the insured was riding his owned, uninsured motorcycle because a motorcycle is a motor vehicle for purposes of the law. The state statute had been enacted specifically to overturn the result of an earlier Minnesota supreme court case, Nygaard v. State Farm Mutual Automobile Insurance Company, 221 N.W.2d 151 (Minn. 1974), in which the court had held that a land motor vehicle included a motorcycle for purposes of excluding coverage, but that the exclusion itself was void.

 The court had ruled that the exclusion was void as against the public policy that was the basis for the uninsured motorists statute. The Hanson court rejected the argument that the following statute, as amended to overturn the result in Nygaard, did not apply to motorcycles: "The uninsured and underinsured motorist coverages required by this subdivision do not apply to bodily injury of the insured while occupying a motor vehicle owned by the insured unless the occupied vehicle is an insured motor vehicle."

 A Texas court of appeals also ruled against uninsured motorists coverage for an insured who was injured while driving his uninsured motorcycle. The court, in Equitable General Insurance Company v. Williams, 620 S.W.2d 608 (Tex. App. 1981), found that the motorcycle was a motor vehicle for purposes of the owned, uninsured vehicle exclusion. The court found no definition for motor vehicle in either the policy or the uninsured motorist endorsement, so it relied primarily on the endorsement's definition of "insured motor vehicle." The endorsement defined an "insured motor vehicle" as a private passenger, farm, or utility automobile described in the policy. The court noted that, under a Texas statute, the term "motor vehicle" specifically included a motorcycle. The court also found that the term "motor vehicle" has generally been interpreted by the courts as having a much broader meaning than the word "automobile." Under case law, "motor vehicle" has been defined as a self-propelled vehicle designed for, intended for, or actually used to transport persons or property over roads or highways.

 This definition came into play in a case concerning coverage for an insured who had been riding on an owned, uninsured moped. In Farmers Insurance Exchange v. Galvin, 216 Cal. Rptr. 844 (Cal. App. 1985), the court found that there was uninsured motorists coverage for the insured's son because the moped was not a land motor vehicle. The court found the term "motor vehicle" ambiguous in this case and construed it narrowly against the insurer. The court found the term ambiguous because various dictionaries describe a motor vehicle as a heavyweight, powerful, and self-propelled vehicle, whereas Webster's Dictionary defined a moped as a "light weight low-powered motorbike that can be pedaled." The court said that mopeds are not vehicles "designed for use principally upon streets and highways" because they are not designed for use principally on highways, and may, in fact, even be prohibited from operating on freeways.

 The court therefore found that comparing a moped with a motorcycle was inappropriate for exclusionary purposes, noting that under California vehicle code, a moped is defined separately from a motor vehicle. It noted that a motorcycle is also defined separately from a motor vehicle under the statute, but as a type of motor vehicle. The statute defining "motor vehicle" described it as a vehicle that is self-propelled, but the definition of "motorized bicycle" described a moped as a vehicle with pedals "for propulsion by human power" or a slow-moving motorized vehicle "with less than 2 gross brake horsepower." In California, motorcycles must be registered, but mopeds are exempt.

 Having stated that a moped is not a motor vehicle under the policy exclusion, the court also rejected the argument that it is unfair to characterize a moped as a motor vehicle for coverage purposes, but not for exclusionary purposes. Apparently, some California cases have found coverage for mopeds as motor vehicles. The court pointed out that this result was justifiable because "an entirely different rule of construction applies to exclusionary clauses as distinguished from coverage clauses," with exclusionary clauses being interpreted narrowly against the insurer.

 In contrast, however, the Massachusetts Supreme Court held that an uninsured moped was a land motor vehicle in Royal-Globe Insurance Company v. Schultz, 434 N.E.2d 213 (Mass. 1982), so the owner could not recover under his underinsured motorists coverage. Using the American Heritage Dictionary for authority, the court said that the term "land motor vehicle" is not ambiguous because it may be defined as "[a] two-wheeled vehicle resembling a bicycle and having two pedals and a small motor by which it is driven." Since a moped moves over land and is motorized, the court concluded that it is included in the definition of "land motor vehicle." The Massachusetts court conceded that state law expressly excluded "motorized bicycles" from the definition of "motor vehicles" for purposes of compulsory insurance coverage. However, since the coverage in question was optional, the only concern was with the terms of the contract.

 Despite the many cases that would seem to have settled disputes over motorcycles, that is far from the truth. Connecticut statute permits a coverage exclusion: ″[N]o insurer shall be required to provide uninsured and underinsured motorist coverage to (A) a named insured or relatives residing in his household when occupying, or struck as a pedestrian by, an uninsured or underinsured motor vehicle or a motorcycle that is owned by the named insured, or (B) any insured occupying an uninsured or underinsured motor vehicle or motorcycle that is owned by such insured" (Section § 38a-336(a)(1). The insured owned (and insured) two automobiles; nonetheless, when he was injured while riding his owned (but not insured) motorcycle, the court in McDonough v. Forrest, 21 A.3d 546 (Ct. App. 2011) held that the statute was quite clear in allowing the insurer to exclude coverage in such a situation.

Similarly, the Maryland code (Insurance §19-509(f)(1) allows an auto insurer to exclude coverage for vehicles owned, but not described or covered by the liability coverage in the policy. The court in Government Employees Insurance Company v. Comer, 18 A.3d 830 (Md. App. 2011) stated that one of the purposes of the statute was to prevent families owning several vehicles and insuring only one or two of them, leaving other vehicles uninsured or underinsured under and different policy, and being able to claim uninsured or underinsured motorist benefits from the first insurer even though no premium was paid for coverage of the other vehicles.

 New developments in motorcycles can sometimes lead to disputes. In State Automobile Insurance Company v. Pasquale, 862 N.E. 2d 483 (Oh. 2007), the insured's son was killed when he was playing on a dirt track built for motocross events. The rider of an off-highway motorcycle took a jump and came down on the boy. The insured submitted underinsured motorist claims under both his personal and his business auto policies. The claims were denied based on the policies' exclusions for vehicles designed for use mainly off public roads while not on public roads. The trial court agreed. But on appeal, the court looked at the Ohio statute and said that there were four classes of vehicles that could be excluded, but ″off-highway motorcycle″ was not one of them. Therefore, the trial court verdict was overturned. But when the case reached the Ohio Supreme Court, the court said that an ″off-highway motorcycle″ was defined and added to the statute in 1999. All parties had agreed that the vehicle in question was an ″off-highway motorcycle″ and not a general ″motor vehicle." Further, the court held that the purpose of the UM/UIM statute was ″for the protection of those using the highways from injury caused by other users of the highways who have no or inadequate liability coverage." As the Ohio statute was written, the language need not specifically exempt off-road vehicles since the statute only contemplated vehicles designed for highway use.