What do you think about this one?  The California Supreme Court is presently attempting to decide whether or not a homeowner’s insurance policy should cover a sixteen-year-old’s accidental shooting of his best friend which yielded an involuntary manslaughter conviction.  There are two somewhat contrary clauses in the insurance policy that are causing the problem.  On the one hand, the insurance policy specifically guarantees coverage for negligent acts.  On the other hand, the insurance company indicates it does not cover illegal acts.  So what do you do if you have a negligent but illegal act?  At the oral argument, the Judges expressed concern over the term “illegal acts.”  The Justices indicated that if an illegal act is deemed to be anything that violates the law, then the policy of insurance would have absolutely no benefit if one did something tht was illegal but unintentional.


Most insurance companies do not use the term “illegal acts,” but rather exclude coverage for “criminal acts.”  The Justices seemed to indicate that they far preferred that clause to the one that Safeco, the writer of the homeowner’s policy, used in this matter. 


Kelly Smith accidentally shot his friend with a handgun he found in his father’s jacket.  The family of the deceased filed a wrongful death suit against the Smith family.  Safeco, initially agreed to defend and indemnify the Smith family, but later changed its mind.  The Smith family challenged this refusal to defend in Superior Court, and the trial court judge agreed that Safeco had to defend and indemnify.

This ruling was reversed by the Court of Appeal, which held that as involuntary manslaughter is an illegal act, it is therefore not something that reasonably could be contemplated to be covered by an insurance policy.


One of the Justices on the State Supreme Court who is concerned about the vagueness and broadness of what is or is not an illegal act, indicated her belief that an insurance company could use this clause to get them out from covering losses from a house that burns down if the owner did not comply with the law requiring smoke detectors. 


I agree that the “illegal acts” clause is too broad.  If I am driving in the rain and lose control of my car, and I go through a stop sign and collide with you, is my insurance company going to argue that I committed an illegal act by going through the stop sign and that therefore they should not have to cover me?


Every once in a while I’ll see a policy or get something in the mail that offers me insurance for “accidental death or dismemberment.”  I always wonder what that’s about, and  I often end up deciding that the dismemberment perhaps sounds worse than the alternative.  Here you have a truly accidental death.  Kelly Smith accidently shot his best friend.  The criminal justice system decided he had to take some responsibility for the accident, and he was convicted of involuntary manslaughter. 


I hope the Court rules against Safeco.  I would decide that the clause that indicates coverage for negligent acts takes priority in this case.  Protection from losses due to negligent acts is why we buy insurance.  If you and I get into a car accident, my auto insurance will cover me.  If, on the other hand, I intentionally attempt to ram you with my car, that intentional act takes away the insurance company’s obligation to cover me.  There has always been a distinction in the law that holds that intentional torts free an insurance company from its obligation to indemnify, and I think that is appropriate.  An insurance company cannot predict nor should it have to insure against a deliberate act on the part of an individual; however, an accidental act is what insurance is all about, from auto insurance to homeowner’s insurance to any other type of insurance policy that can be sold. 


The role of the courts is to follow the law, do the right thing, and hope that what they do yields appropriate behavior in the future.  Hopefully, the California State Supreme Court will send Safeco a message, so that in the future, they will change the way they word their policies.