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No Insurance Coverage For Innocent Victims When Automobile Collision Is Intentional
By: Charles W. Benton, Esq.

A recent decision of Justice Francois A. Rivera, Kings Supreme Court, illustrates that a loss which is the result of an intentional act may void insurance coverage even for innocent automobile accident victims.

The facts of National Grange Mutual Insurance Company v. Vitebskaya, 2003 N.Y. Misc. LEXIS 1275, 766 N.Y.S.2d 320, reveal that two passengers in a vehicle which rear-ended another automobile sued both drivers involved in the collision. The automobile insurance company insuring their vehicle's driver disclaimed coverage, claiming that the collision was an intentional act and thus was not covered by the accident protection benefit of the insurance policy. The passengers filed a demand for uninsured motorist arbitration upon the disclaiming insurance company. The insurance company filed a petition to permanently stay that arbitration.

Alleging that its insured was fraudulently seeking insurance coverage for an intentional collision, the insurance company presented copies of police reports, deposition testimony of the two passengers and recorded and written statements and other documents. The submitted documents revealed that the insured had two nearly identical accidents within 60 days after the policy was initially taken out, with one accident occurring only two days after the policy application was submitted. Two and one-half months after the inception of the policy, it was canceled for non-payment of premiums.

The insurance company emphasized numerous inconsistencies between the written and recorded statements and the deposition testimony of the persons involved in the accident. These discrepancies pertained to the number and identity of the passengers in the insured vehicle, the time when and the sequence in which the occupants entered the vehicle, their reasons for doing so, their destination, what happened after the accident and the disposition of the insured vehicle.

Justice Rivera found that a party seeking insurance benefits must prove that a loss occurred and that the loss was covered by the insurance policy. When the loss is a result of an intentional act, however, there is no coverage. In the court's view, the two collisions in which the insured was involved had remarkable similarities including the time and place of the occurrences and the type of vehicles involved. These facts and the other discrepancies presented by the insurance company, in the court's eyes, formed a compelling and persuasive body of circumstantial evidence that the underlying loss resulted from an intentional collision staged for the purpose of insurance fraud. Such a showing was sufficient in the court's mind to shift the burden to the passengers seeking arbitration to dispute the fraud allegations.

In contrast, the passengers failed to proffer any facts disputing the allegation that the collision was intentional Thus, a framed issue hearing was deemed unnecessary, since an insurance company cannot be compelled to arbitrate a claim that the parties never agreed to arbitrate and for which there is no coverage.

Most importantly, the court held that an intentional act may void coverage even if not committed by an insurance claimant. Thus, even though the passengers involved in the accident may be innocent victims, an insurance company is not required to provide benefits to them when the collision at issue is a result of an intentional act. Since the passengers' injuries were not the result of an accident, they were not entitled to uninsured motorist benefits under the subject insurance policy.

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