COURT LOOKS TO CAUSE RATHER THAN EFFECT TO DETERMINE COVERAGE LIMIT IN AN AUTO INSURANCE LIABILITY POLICY THAT LEAVES WORD "ACCIDENT" UNDEFINED
Posted by H. Lee Pruett
Justice David Nahmias, the newest member of the Georgia Supreme Court, recently authored an opinion which ruled in favor of the insurer in an important case that sought to determine the meaning of “accident”—and the resulting limits of coverage—when the word is undefined in the policy. Answering a certified question from the U.S. District Court for the Middle District of Georgia, the majority in State Auto Property and Casualty Co. v. Matty, Case No. S09Q1846 (Ga. S. Ct., Mar. 1, 2010), held that when a liability policy leaves “accident” undefined, the court must apply the “cause theory” to determine whether there was more than one accident under the policy. In other words, the court will look to the cause of the injuries, regardless of whether each injury occurred in the same moment of time, rather than the number of resulting injuries. Thus, a limit of liability for one “accident” would apply to all injuries resulting from one proximate cause, and would not be extended to each individual injury.
