Court Upholds Limited Definitions of "You" and "Policyholder
In Laird v. Allstate Ins. Co., 2009 Or. App. LEXIS 1810 (Nov. 18, 2009), the court interpreted the term “policyholder” in the context of an automobile policy. Plaintiff was injured in an automobile accident where the driver of the other vehicle was allegedly not authorized to use the vehicle. The unauthorized user was the friend of the boyfriend of the daughter of the named insureds. The insurer argued that only the parents were “policyholders” and therefore only they could authorize the use of the vehicle.
The case turned on the interpretation of the undefined term, “policyholder.” The court first noted that the policy defined “you” and “your” as the policyholder and the policyholder’s spouse. The definition of “your” is relevant because the policy covered persons using the vehicle with “your permission.” Plaintiff asserted that the term “policyholder” must mean something different from “named insured” because both terms were used in the policy. The court rejected this argument. Applying common dictionary meanings, the court determined that “policyholder” means the “person who purchases and has the right to control the policy.” The court supported this position by concluding that the terms “you” and “your” refer to the named insureds and not other listed drivers, like permissive users. Since the daughter of the named insureds was not herself a named insured, she did not qualify as someone who could give permission for another person to use the vehicle. The court concluded that since the driver was not an insured, the insurer was entitled to a directed verdict regarding its duties under the policy.
