Low, Ball & Lynch’s

WEEKLY LAW RESUME

January 13, 2005 Issue      By: Ray Coates

Coverage - Uninsured Motorist Coverage - Exclusions

Robert W. Daun v. USAA Casualty Insurance Company

Court of Appeal, Fourth District

(January 4, 2026)

The California Insurance Code specifies the mandatory provisions required in any automobile liability insurance policy.  This case addressed the issue of whether an insurer is entitled to exclude uninsured motorist coverage while the insured operated a motor vehicle with less than four wheels.

Robert W. Daun was riding a two-wheeled motorcycle owned by the City of San Diego and furnished to him as a police officer.  He was struck by a vehicle operated by a motorist who had coverage limits of $15,000.  Those policy limits were paid, and, in addition, Daun received workers' compensation benefits.

USAA Casualty Insurance Company insured Daun.  The motorcycle was not listed as an insured vehicle on the policy.  The policy further excluded coverage where "you or any family member is the operator of any self-propelled vehicle with less than four wheels that is not insured for this coverage under this policy."  When Daun made a UIM claim, he was told the claim was excluded.

Daun filed an action for violation of Business & Professions Code section 17200.  The trial court entered judgment in favor of USAA after concluding there was no coverage.  Daun appealed.

The Court of Appeal reversed.  The Court noted that UM and UIM coverage is mandatory in California unless waived by written waiver.  The provisions of such coverage specify the mandatory minimum coverage required.  Under the statute, the named insured and his or her family members living in the same household are covered while they are occupants of a motor vehicle or otherwise.  Coverage afforded to any other person is limited to when they are in or upon or entering into or alighting from the insured motor vehicle.  Thus, the named insured and his family are provided coverage without reference to an insured motor vehicle or any motor vehicle.  Coverage for other persons depends on a connection with an insured motor vehicle.  It thus was erroneous to deny coverage to Daun based upon the type of vehicle he was operating.

The Court noted that certain exclusions were permitted under the Code for uninsured motorist coverage.  None applied in this situation.  Daun did not own the motorcycle he was operating.  The vehicle was permissively self-insured by the County.  Thus, no statutory exemptions applied.

In addition, the Court noted that the exclusion was contrary to the allowed exclusions set forth by statute.  Daun was entitled to UIM coverage because, at the time of the accident, he was injured by an underinsured motorist.  The exclusion asserted was not one of the listed exclusions permitted.  As such, it was held to be void as against public policy because it imposed a limitation upon UIM coverage not authorized by statute.

The judgment was reversed and remanded to the trial court for further proceedings.

COMMENT

This case reiterates the rule that automobile insurers may not unduly restrict coverage by provisions that are more restrictive than allowed by statute.  Under California law, uninsured motorist coverage applies whether an insured is occupying a vehicle or not.

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