Sometimes an accident occurs and someone is injured, but the responsible person has no insurance or does not have adequate insurance to pay full compensation for the injuries or property damage. Fortunately, insurance coverage may be available if the injured party is a resident of the same household as an insured person under an underinsured motorist (UIM) policy.
A 16-year-old girl named Harley was riding in her cousin Randall’s truck when he crashed it. Harley was injured when she was thrown from the truck.
Harley’s medical expenses came to $81,087, but Randall’s insurance was only $30,000. She filed a complaint through her guardian ad litem, and Randall’s insurer paid.
Since Randall’s insurance did not cover Harley’s medical expenses, the complaint also contained an underinsured motorist claim against a policy held by Harley’s grandfather, Thurman, issued by North Carolina Farm Bureau Mutual Insurance Company, Inc. (“Plaintiff”).
Plaintiff, not wishing to pay, asked the trial court for declaratory judgment that Harley was not covered by Thurman’s policy because Harley was not a resident of Thurman’s household at the time of the accident.
The trial court granted the insurance company’s motion. Harley, Reggie, Randall, and Thurman appealed.
The Court of Appeals of North Carolina considered the evidence.
To begin with, the Court found that there was no dispute that Harley was a blood relative and a member of Thurman’s family. She was his granddaughter. However, the Court observed that whether she was a resident in her grandfather’s household was more complicated.
Thurman owned a large farm with numerous livestock. Thurman considered his farm to be a “family farm.” There were a number of houses on the property. Harley’s father, Thurman’s son Reggie, when he wasn’t in jail or prison, lived in a house on the farm with Harley and her brothers.
During times when Reggie was incarcerated, Harley moved into another house on the farm with Thurman and his girlfriend, Donna. Harley’s mother was not very involved in her life. Thurman provided food, clothing, housing, utilities, phone, and other expenses for Harley, her brothers, and a number of other people, some of whom were relatives and others of whom were just people needing help.
Harley and Thurman both testified that even during the times when she wasn’t living in the same house with him, she saw her grandfather almost every day. He drove her to doctor and dentist appointments. Thurman had even been court-appointed as Harley’s guardian for a year when she lived with him because of her father’s legal problems.
The Court found Thurman to be the stabilizing influence in Harley’s life, allowing her, with her father and brothers, to live rent-free on his property. The Court considered both Harley and her father, Reggie, to be residents of Thurman’s “family farm.”
The Court found that Thurman paid for almost all of Harley’s living expenses, from necessities like food and clothing to such little luxuries as her prom dress. When Harley’s father was in jail or prison and her mother unavailable, she could live with Thurman, who helped her with her schoolwork and took her to school.
Finally, the Court found that Harley and Thurman both considered Harley to be a part of Thurman’s household.
In light of all the circumstances of Harley and Thurman’s situation, as complicated as it was, the Court ruled that Harley was a resident of Thurman’s household as defined by Plaintiff’s insurance policy at the time of the accident, and therefore she was covered under the policy.
The Court of Appeals reversed the trial court’s summary judgment for the insurance company on the coverage issue and remanded the case back to the trial court.
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