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  • WisBar News
    January 08, 2014

    Financial Responsibility Law Trumps Exclusion in Motorcycle Insurance Case

    Jan. 8, 2014 – Drivers with spotty driving records must prove financial responsibility for future liability. Such proof can be submitted through “certified” insurance. Recently, a state appeals court clarified coverage issues relating to such “certified” policies.

    Joseph Westra had a certified insurance policy with Acuity Mutual Insurance under the financial responsibility law, Wis. Stat. section 344.31, in addition to other policies, when he obtained permission to drive his friend’s motorcycle. The motorcycle collided with a truck, and motorcycle passenger Wendi Hechimovich sustained serious injuries.

    Through the motorcycle owner’s insurance policy, the truck driver’s insurance policy, Westra’s insurance policy, and her own underinsured policy, Hechimovich obtained $400,000 for her medical expenses. But the actual expenses exceeded $700,000.

    Hechimovich sought an extra $50,000 under the law that required Westra to obtain a certified policy of financial responsibility. However, a circuit court ruled that Westra’s other “noncertified” insurance policy, which covered $100,000, satisfied the obligation.

    That is, the circuit court ruled that a “certified” policy does not provide excess coverage if a victim recovers under other applicable noncertified insurance policies.

    In Hechimovich v. Acuity Mutual Insurance Co., 2013AP1011 (Dec. 27, 2013), a three-judge panel for the District IV Court of Appeals reversed, concluding that a “certified” policy under the financial responsibility law was not an “excess” policy in this case.

    “The parties agree that Acuity certified Westra’s policy as proof of financial responsibility in accordance with Wis. Stat. § 344.31,” wrote Judge JoAnne Kloppenburg. “The parties identify no other certified policy issued to Westra.

    “As the only certified financial responsibility policy obtained by and issued to Westra, the Acuity policy must fulfill the financial responsibility law’s requirements,” she explained.

    Under section 344.33(2), the certified policy must “insure the person named therein using any motor vehicle.” Thus, the court rejected Acuity’s claim that the policy excluded coverage for injuries sustained by the use of vehicles with “less than four wheels.”

    Finally, the appeals court refused Hechimovich’s request for a ruling that Acuity could not seek reimbursement from Westra. The court said Hechimovich did not have standing to make that request and the issue was not ripe for adjudication. 

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