DEFINING THE "INSURED"
In matters involving motor vehicle accidents where personally injuries result, the insurer’s duty to pay proceeds under the terms of the policy will hinge on the question of “who is the insured?” The “insured” is the person whose loss triggers the insurer’s duty to make payment. In short, if the person claiming injury is not considered an “insured” under the policy, the insurer has no duty to make payment for the loss. Generally, there are two classes of insureds: (1) the person specifically designated in the policy (usually referred to as the policyholder); and (2) a designated class of persons also covered in the policy. This second class of “insureds” has been defined statutorily to include the following persons: “ . . . [W]hile resident of the same household, the spouse of the named insured and relatives of either . . . and any person who uses with the consent, expressed or implied, of the named insured the motor vehicle to which the policy applies and a guest in the motor vehicle to which the policy applies or the personal representative of any of the above.” (SC Code Ann. § 38-77-30(7)). This statutorily defined class of “insureds”, often referred to as the Omnibus Clause, is usually included in the terms of the agreement, but its inclusion is not necessary to state a claim under the policy. In summary, under South Carolina insurance law, the persons considered an “insured” under an automobile policy include: (1) the policyholder; (2) the policyholder’s spouse; (3) relatives who reside with the policyholder (by blood or marriage); (4) permissive users; (5) guests in the vehicle; and (6) personal representatives. Though the definition appears clear, interpretation and explanation of the Omnibus Clause has been the issue of several insurance coverage disputes decided by the Court. Who is considered a permissive user? Who is a relative? These are some of the questions that needed a closer look.
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