Are Snowmobiles "Motor Vehicles" Under SUM Coverage?
SUM coverage and snowmobiles were on the menu of topics decided by the Appellate Division Second Department on May 27, 2015 in State Farm Mut. Auto. Ins. Co. v. Jones, 128 A.D.3d 1074 (N.Y. App. Div. 2015).
William T. Jones sustained injuries in a snowmobile accident in Lewis County. The snowmobile that he was operating collided with a snowmobile owned by non-party Steven Roy and insured by Nationwide Insurance. The snowmobile that Jones was operating was owned by non-party Robert Perino and insured by the petitioner, State Farm Mutual Automobile Insurance Company (hereinafter State Farm). Jones settled for the $50,000 policy limit of the Nationwide Insurance policy and, after due notice, sought to recover an additional $50,000 under the supplemental underinsured motorist (hereinafter SUM) provisions of Robert Perino's policy with State Farm (hereinafter the policy). State Farm denied coverage on the ground that Jones was not an insured under the SUM provisions of the policy. Orange County Supreme Court Judge Colangelo found in favor of State Farm, granting a permanent stay of the demanded arbitration.
The Appellate Division reversed. State Farm's argument, which was accepted by the Supreme Court, was that a snowmobile is not a "motor vehicle" as that term appears in the SUM endorsement. State Farm relied on the definition of "motor vehicle" contained in the Vehicle and Traffic Law, which specifically excludes snowmobiles (see Vehicle and Traffic Law §§ 125, 2229). Thus, Jones was not insured for SUM coverage because he was not occupying a motor vehicle at the time of the accident.
The Appellate Court noted that the policy only covered one vehicle, the snowmobile. "We find that the policy, when read as a whole, is ambiguous as to whether the term "motor vehicle" in the SUM endorsement refers to the snowmobile, the only vehicle covered by the policy. Contrary to State Farm's contention, and the Supreme Court's determination, this ambiguity must be resolved "against the insurer and in favor of coverage" (Nationwide Mut. Ins. Co. v CNA Ins. Co., 286 AD2d 485, 487; see Shants, Inc. v Capital One, N.A., 124 AD3d at 759), without reference to the definition of "motor vehicle" set forth in the Vehicle and Traffic Law. Accordingly, the Supreme Court should have denied that branch of the petition which was to permanently stay arbitration on the ground that Jones was not covered by the SUM provisions of the policy at the time of the accident."