Dallas Personal Injury Attorney

What is the Family Member Exclusion in an Auto Insurance Policy in Texas?

The “family member exclusion” in a Texas automobile insurance policy is a clause which excludes claims made by family members against another family member in an insurance policy.  This issue usually arises when the driver of a vehicle is liable for causing an accident and the injured passengers are members of the driver’s family.

The Scenario.

Assume you are driving a vehicle with your family as passengers, such as your spouse, children, parents, etc.  You are involved in an accident and are found at fault.  Your passengers are seriously injured in the accident.

The vehicle is covered by an insurance policy that provides for coverage of $100,000 per person and $300,000 per accident.  Can the injured passengers make an injury claim against the insurance policy?  The answer is “Yes.”  But there is a catch.

The Family Member Exclusion.

As stated before, the family member exclusion is  clause commonly found in most automobile insurance policies.  The clause is found under the Liability section of an insurance policy called “Exclusions.”  It normally reads as follows:

“We do not provide Liability Coverage for you or any family member for bodily injury to you or any family member…”

The purpose of this exclusion is to prevent and discourage fraud and collusion between family members who may try to contrive injury claims for the purpose of collecting settlement from the insurance carriers.

A family member is defined as:

“a person who is a resident of your household and related to you by blood, marriage or adoption.”

Therefore, in order for the exclusion to apply, the injured person must be related to the driver by blood, marriage, or adoption and be a member of the driver’s household.  A family member that does not reside with the driver is not subject to the exclusion.

But the reality is that family members living in the same household tend to be the most common passengers in a personal auto.  This would include spouses, children, etc.

The Legal Challenge to the Family Member Exclusion.

In 1993, the Texas Supreme Court was confronted with a legal challenge to the enforceability of the family member exclusion in the case of  National County Mutual Fire Insurance Co. v. Johnson, 879 S.W.2d 1 (Tex. 1993).

In that case, a driver was his passenger wife were involved in a motor vehicle accident in which the wife was injured.  The wife pursued a claim against her husband for her injuries.  The husband asked his insurance carrier to provide coverage for the accident and the injury claims of his wife.  The insurance company refused to provide coverage citing the family member exclusion in the policy.

The Court held that, under the Texas Motor Vehicle-Safety Responsibility Act, every vehicle must be covered by certain minimum coverage in order to pay for damages and injuries caused by negligent driver.  The Court held that it would be against public policy to enforce the family member exclusion and deprive injured individuals of the protections that the law was intended to provide.

Therefore, the Court held that, is spite of the family member exclusion, an insurance carrier may not use the exclusion to deprive an injured person of the benefits of the minimum required coverages.  Therefore, a family member injured in an automobile accident is entitled to coverage up to the minimum required coverage limits.

What about Coverage that are Higher than the Minimum Coverages.

The policy in our previous example, however, provided for coverage which is above the Texas required minimum limits.  Does that mean a family member may make a claim for the higher limits.  The answer is “No.”  The Johnson case only held that the the family member exclusion may not be enforced to deprive someone of the minimum required covergaes.  Any covergae limits above the minimum required may be excluded from coverage.

Therefore, in our example, the injured wife may make a claim for her injuries.  But the insurance carrier is only required to provide coverage up to the minimum bodily injury coverage of $30,000 per person.  The insurance carrier is not required to provide coverage up to the $100,000 limit provided under the policy.

Minimum Coverage

Higher Coverage Allowed

Family member residing in household

Yes

No

Family member not residing in household

Yes

Yes

Non-family member residing in household

Yes

Yes

Non-family member not residing in household

Yes

Yes

Final Thoughts

Robert C. Slim Personal Injury Attorney in Dallas

Robert C. Slim

The family member exclusion is something that can certainly catch someone by surprise.  If a family member is seriously injured in an accident, then the exclusion may come into play.  But do not be mislead into thinking that the you have no rights at all.  That is probably what the insurance company wants you to think and I have seen it happen.  So, it is best to consult with an attorney who will explore all your avenues of recovery to get you the most compensation for your injuries.

Fighting for injured Texans in the Dallas / Fort Worth area has been the focus of my practice since 1995.  It’s not a gimmick or a sideline.  It’s my specialty.

If you have been injured, get the representation from an attorney who know the ropes of D/FW area.  Robert C. Slim has been helping injured Texans get the compensation and justice they deserve. The consultation is absolutely free.  And there are never any fees or expenses owed until you collect on your case.

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