COA Opinion: Insured retained an “insurable interest” in vehicle after intra-family transfer of ownership
On December 29, 2009, the Court of Appeals published a 2-1 opinion in Morrison v. Secura Insurance, No. 286936, affirming the trial court’s grant of summary disposition in favor of Plaintiffs. Plaintiffs suffered injuries after their motorcycle was struck by a Chevrolet Cavalier. Plaintiffs brought this declaratory judgment action against the Defendant insurance company regarding the validity of the no-fault insurance policy covering the Cavalier. The insurance policy at issue was purchased by the driver’s mother in October 2005. The mother was listed as the named insured, and both the mother and the driver were listed as “drivers” of the vehicle, even though only the driver drove the Cavalier. The driver’s mother paid the premiums for the entire year up front. At the time the insurance policy was purchased, the driver’s mother was the owner and registrant of the Cavalier. In March 2006, the driver’s mother transferred title to the Cavalier to the driver, who applied for a new title and registered the Cavalier in her own name. The accident happened on April 16, 2006. Defendant argued that the insurance policy was void at the time of the accident because the insured did not have an “insurable interest” in the Cavalier at the time. The Court of Appeals determined that the trial court’s ruling was correct because the driver’s mother had an “insurable interest” at the time the insurance policy was purchased and paid for, the insured-against risk had not changed, the basis for the “insurable interest” requirement is weak, and public policy favoring family units is strong. The Court of Appeals did not find the need to reach the issue of whether the driver’s mother had an “insurable interest” in the Cavalier at the time of the accident. Judge Talbot’s dissenting opinion can be found here.