The case of Progressive Gulf Insurance Company v. Faehnrich outlines what can happen when drivers with out-of-state insurance policies seek to gain the advantageous aspects of Nevada’s insurance laws. Issues with how one sate handles the laws and policies of another is why working with local personal injury attorneys is beneficial. They know the laws of the states they are licensed in.
Case Overview
A family obtained an insurance policy in Mississippi, and listed Mississippi as their residence. When the couple divorced, the wife moved to Nevada with the children but maintained her Mississippi insurance policy. Shortly after moving, the mother and two sons were involved in a single car crash, resulting in injuries to both sons. The Mississippi policy contained a household exclusion which eliminated any coverage that could be awarded to the boys for claims against their mother.
Nevada insurance policies cannot have a household exclusion. An exclusion of this nature is said to violate Nevada’s public policy. The issue to be decided was whether the state of Nevada would uphold an exclusion permitted by another state when that exclusion is clearly contrary to Nevada’s public policy.
The Nevada Supreme Court analyzed all of the relevant facts, including the fact that the car involved in the accident still had Mississippi plates and the mother had a Mississippi driver’s license. Although the court did not doubt that the family intended to become Nevada residents, it appeared that because the car had not yet been registered in Nevada, the court did not yet feel that the family was subject to Nevada’s mandatory insurance laws at the time of the crash. Accordingly, because the policy was purchased in Mississippi and the risk of a crash was contemplated there, the court upheld the Mississippi exclusion. As such, the sons could not recover any insurance money.
The Takeaway
This case should serve as a cautionary tale to parties driving through Nevada who are involved in crashes or parties who have recently moved to Nevada. The simple fact of being involved in an accident in Nevada will not allow them to take advantage of Nevada’s favorable insurance laws. The laws of the state where an insurance policy was purchased will remain in place.
If you or someone you know is injured in an accident in Nevada, contact the experienced personal injury attorneys at Clear Counsel Law Group. We’ll fight for your rights, help you understand the law, and work to win you maximum compensation.