Denied Coverage under Motor Vehicle Exclusion of Homeowner’s Policy
In State Farm v. Perez, Perez was riding in a car driven by Baeza when he lost control of the vehicle and struck a tree. Perez and another passenger, Espinosa, were severely injured. Baeza lived with his parents and was insured under a homeowner’s insurance policy issued by State Farm Casualty to Baeza’s parents for their residence in Elgin, Illinois. An automobile insurance policy issued by State Farm Mutual Auto insured the vehicle involved in the accident.
Perez and Espinosa sued Baeza for negligent operation of the vehicle and negligent modification of the vehicle seats. Baeza gave notice of the suit to State Farm Auto and State Farm Casualty. State Farm Casualty denied coverage under the motor vehicle exclusion of the homeowner’s policy. The policy stated that coverage did not apply to bodily injury or property damage arising out of the ownership, maintenance, use, loading and unloading of a motor vehicle owned or operated by or rented or loaned to any insured.
The issue was whether the homeowner’s policy exclusion applied to bar coverage so as to render a judgment on the pleadings in favor of State Farm Casualty.
The exclusion policy did not define the term “use” so the court gave it its plain and ordinary meaning, to drive and operate a vehicle. The court held that Baeza drove the car at the time of the accident, an activity that squarely fell under the “use of a motor vehicle” language in the exclusion. The court held that a causal relation existed between Perez’s injuries and Baeza’s use of the car, causing her injuries to come within the policy’s exclusion because the involvement of the car was the cause of her injuries. Thus, the exclusion applied and the insurer had no duty to defend Baeza in the underlying suit.
State Farm Fire and Casualty Co. v. Perez, 899 N.E.2d 1231 (Ill. App. 1Dist., 2008).
