WisBar News: Mother's auto insurance policy does not cover sponsorship liability for minor son's accident:

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  • Mother's auto insurance policy does not cover sponsorship liability for minor son's accident

    Sponsoring a minor’s driving license did not amount to “use” of the minor’s vehicle under an insurance policy that covered damages for an insured’s “use” of a family member’s car.

    Joe Forward

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    Mother’s auto insurance policy does not cover 
sponsorship liability for minor son’s accident Sept. 30, 2011 – A Wisconsin appeals court has ruled in favor of an insurance company on a novel issue concerning whether sponsorship of a minor driver amounts to “use” of a vehicle for coverage purposes.

    Wis. Stat. section 343.15, a parent or adult must sponsor a minor’s driving license to attest the minor is in high school, not habitually truant, or has graduated from high school or an equivalent. Under section 343.15(2)(b), the sponsor becomes jointly and severally liable for the minor’s negligent driving.

    Laura Link sponsored her minor son, David Jacobson. Two passengers in the car Jacobsen was driving were killed when the car veered of the road. Jacobsen carried his own auto insurance, and the car was titled in his name.

    Link’s auto insurance policy with Progressive Northern Insurance Company covered damages for bodily injury and property damages if an insured person was legally responsible for an accident. Under section 343.15(2)(b), Link was legally responsible for the accident.

    Link’s insurance policy with Progressive policy excluded coverage for bodily injury or property damage arising out of the “use” of a vehicle owned by a relative or available for the regular use of a relative. But the exclusion did not apply to Link’s “use” of such vehicle.

    The estates of the victims killed in the accident argued that Link’s sponsorship constituted “use” of Jacobsen’s car. But in Progressive Northern Ins. Co. v. David Jacobsen, 2010AP2660 (Sept. 27, 2011), the District III Wisconsin Court of Appeals ruled that sponsorship did not constitute use of the vehicle.

    “Whether an insured’s sponsorship of a relative’s driver’s license constitutes a use of the relative’s vehicle appears to be a novel question,” Reserve Judge Thomas Cane wrote.

    The appeals court explained that “use” need not involve actual driving, but “must have some foundation in the inherent nature of the vehicle,” i.e., whether the activity is reasonably expected as a normal incident to the vehicle’s use.

    “Mere sponsorship is an act too far removed from the inherent nature of the vehicle to deem a ‘use’ by an insured,” Judge Cane wrote. “[S]ponsorship is akin to an act that, while tangentially related to a use of an auto, falls short of being a risk for which the parties contemplated coverage.”

    The appeals court rejected the argument that coverage must be provided because Jacobsen would not have been driving but for Link’s sponsorship. “This argument incorrectly equates coverage with causation,” Judge Cane concluded.

    Thus, the appeals court upheld the circuit court’s summary judgment order in favor of Progressive.

    By Joe Forward, Legal Writer, State Bar of Wisconsin