This confusing question arose in a South Dakota court case. An insured's son was moving a rifle away from a passenger's leg in a pick-up truck following a hunting expedition when the rifle discharged, wounding the passenger in the leg. The question before the court was whether this accidental injury arose from the "use" of the pick-up truck, since the truck was parked at the time of the event. The truck was owned by a farm partnership, which had both a primary auto policy and an umbrella policy.
 
The primary insurer filed for declaratory judgment on the issue of whether the accident constituted an 'auto' accident. When the circuit court determined that it did, the insurer appealed. The state's high court examined the facts, and reviewed similar cases. In a prior South Dakota claim, the shooting had involved a passenger handing a gun through a vehicle window, and was found not to be an "auto accident." However, in the more recent case, the South Dakota Supreme Court determined that the loss was an "auto accident."
 
It is important to understand peril definitions and insurance language because they often lead to court disputes. For example, there was a case following Hurricane Katrina in which homeowners whose coverage said it applied to "hurricanes" found that the definition did not include storm surge or wave wash, which are considered part of the flood exclusion. There are also cases in which courts found that the definition of "fire" means "hostile" flame or glow which excludes incidents that involve the accidental burning of a valuable item in a furnace or fireplace, or a scorch from excessive heat such as a hot iron. Because a definition of "fire" is not in the policy, adjusters must be aware of how the courts interpret policy wordings.
 
Coverage analysis is a part of every Crawford Educational Services course. Students are instructed how to review the policy in light of the facts of the claim or the lawsuit, applying the "Eight Corners Rule" where the four corners of coverage must match the four corners of the claim. When they do not, then the adjuster must know what action to take to protect the interests of both the insured and the insurer. For complete course listings, visit our website.