Ambiguity: Tolotti v. United Servs. Auto. Association

The Appellate Division of the New Jersey Superior Court recently reversed a trial court declaratory judgment action declaring that a USAA auto policy provided coverage for injuries caused by the insured while operating a golf cart. USAA denied coverage on the basis of an exclusion for vehicles not declared in the policy, which only listed the insured’s pickup truck. The insured argued that this exclusion was in conflict with another exclusion, which had an exception for miscellaneous vehicles owned by the insured, and that this created ambiguity. The trial court found coverage holding that any ambiguity must be construed in favor of the insured. The Appellate Division reversed the trial court’s finding of coverage, reasoning that it is well settled insurance law that exclusions bear no relationship with each other, and that there is no instance where one exclusion can be properly regarded as inconsistent with another exclusion. When the seemingly conflicting exclusions were read with the insurance agreement, but independent of every other exclusion, no ambiguity that would confuse the average policy holder as to the boundaries of coverage existed, and therefore the court found no coverage existed under the auto policy. 

For the complete judgment: