On Behalf of | Jun 20, 2024 | Firm News

In Buarque de Macedo v. Auto Insurance Co. of Hartford, Connecticut, 480 MD 200, 280 A.3d 679 (Md. App. 2022), the Maryland Court of Appeals rejected a challenge to a household exclusion in a personal umbrella policy.  The case involved a motor vehicle accident.  As a result of the crash, the driver husband caused a collision which killed his wife and his son and inflicted catastrophic injuries upon his daughter, Helena.  Claims were then brought on behalf of Helena and the estates of the wife and son.  The insurer paid the policy limits of the auto policy but then declined coverage under a $2 million personal umbrella policy, relying upon a resident family member exclusion.  The claimants contended that CJP Section 5-806(b) of the Court’s and Judicial Proceedings Article prohibited the use of household exclusions in policies that provided motor vehicle liability coverage.  This argument was rejected, however.

In a prior case, Stickley v. State Farm Fire and Casualty Co., 65 A.3d 141 (Md. 2013), the Maryland Supreme Court interpreted the phrase “motor vehicle liability insureds” in a different statute to mean a primary automobile policy, not a personal umbrella policy.  Looking at the legislative history of CJP §5-806(b), the Court found that the Maryland legislature did not amend the statute in response to the Stickley decision and the household exclusion was valid and enforceable in umbrella policies, notwithstanding CJP §5-806(b).