A Georgia appellate court ruled that the denial of a claim based on a policy exclusion does not render the whole policy invalid. The case is General Sec. Indem. Co. v. Gerald Jones Ford, LLC, 903 S.E.2d 325 (Ga. Ct. App. 2024). 

Jerquavius Berry made a $4,000 down payment on a vehicle purchased from Gerald Jones Ford. He submitted proof of insurance with Falls Lake National Insurance Company and made arrangements with Exeter Finance, LLC to provide the remainder of the vehicle's purchase price. Three days later, Berry totaled the vehicle as he fled law enforcement in Virginia; he was later convicted of fleeing law enforcement in violation of the Virginia Criminal Code. Exeter received no loan payments from Berry. The company's attempts to validate Berry's loan were unsuccessful, and the loan note was returned to GJ Ford.  

GJ Ford first submitted a claim to Berry's insurer, Falls Lake. That claim was denied due to the policy exclusion for property damage incurred while fleeing law enforcement. GJ Ford then filed a claim for physical damage coverage with its own insurer, General Security Indemnity Company of Arizona. GJ Ford's policy included a "spot delivery extension," which provided coverage for vehicles sold and delivered to the purchaser by GJ Ford where GJ Ford had not received payment in full, and the proof of insurance provided by the purchaser was invalid at the time of the occurrence. There was no argument that GJ Ford had sold a vehicle to Berry or that the vehicle was not paid for in full when it was totaled. However, General Security determined that Berry's policy was not invalid at the time of damage, and GJ Ford's claim was denied.