Oklahoma Automobile Insurance Law and Practice Table of Contents CHAPTER 1 GENERAL PRINCIPLES OF INSURANCE §1:1 Introduction. §1:2 Principles of Interpretation. Insurable Interest. §1:3 Insurable Interest. §1:4 -In General. §1:5 -Property Coverages: Collision and Comprehensive. §1:6 --The role of the paper title. §1:7 --The "factual expectation test." When the insured does not have good title. The stolen vehicle problem. §1:8 --The fraudulent buyer as insured. §1:9 --The insurable interest of the loss payee. §1:10 --Insurable interest during a sale. §1:11 --The insurable interest of a mere "bailee." §1:12 --The insurable interest of repairmen. §1:13 --Estoppel or waiver of the insurable interest defense. §1:14 --The return of premiums and insurance payments as a result of no insurable interest. §1:20 -Liability and Uninsured Motorist Insurance. CHAPTER 2 DEFINITIONS §2:1 Introduction. §2:2 "Named Insured," "You," "Your." §2:3 "Accident" or "Occurrence." §2:4 -In General. §2:5 -Accident: Does an "accident" require a "sudden event"? §2:6 -Accident: Was it an intentional act or injury? §2:7 -Accident: Was it an accident from the insured's point of view? §2:8 -Occurrence: How many "occurrences" have there been? §2:12 "Bodily injury." §2:15 "Property Damage." §2:18 "Family Member" or "Relative"; "Resident of Household." §2:19 -Who is "related"? §2:20 -Who is a "resident" of the "household" or "family"? §2:25 "Occupancy";being in, on, upon, entering or alighting from an automobile. §2:26 "Automobile," "Motor vehicle," "Private passenger car," "family car," "utility car." §2:27 "The Insured Car": Described, Replacement, Temporary Substitute, Newly Acquired and Non-Owned. §2:28 -In general. §2:29 -The Described Car. §2:30 -The Replacement Car. §2:31 --Has a Replacement Actually Occurred? §2:32 --Requirement of Notice to Company of Replacement. §2:33 --The time the Replacement Coverage goes into effect. §2:36 -The Newly Acquired Car. §2:37 --The requirement that all vehicles owned by the named insured be insured by the Company. §2:38 --The Notice Requirement. §2:39 --Acquisition of the Newly Acquired Car During the Policy Period. §2:42 -The Temporary Substitute Car. §2:43 --The Requirement that the Described Car be Withdrawn from Normal Use Due to Breakdown. §2:44 --The Requirement that the Substitute Car not be Owned by the Named Insured. §2:47 -Non-Owned Cars. §2:48 --In General. §2:49 --Requirement that it be a "car" or a "private passenger auto." §2:50 --Owned by or Available for the Regular or Frequent Use of the Named Insured. §2:51 --"Use" or "operation" of the vehicle. §2:52 --Use of the non-owned automobile "with permission." CHAPTER 3 CONDITIONS §3:1 Introduction. The Insured’s Duties. §3.5 The Insured's Duties after an Accident or Loss. §3.6 -In General. Notice of Accident. §3:7 -Notice of Accident. §3.8 --In General. §3.9 --When does the obligation to give notice arise, and when is notice timely? "As soon as practicable" or "immediately." §3:10 --Validity of excuses for failure to give notice of accident. §3:11 ---Arguments that the insured had no reason to believe that an" accident" had occurred, or that the insured did not believe he would be liable for the occurrence. §3:12 ---Arguments that an injured person should not be denied coverage simply because an insured failed to give notice. Who can give notice, in general. §3:13 ---Arguments that when an insured is covered by two separate companies, it may not occur to him to give notice to both. §3:14 ---Arguments that a named insured employer is excused from giving notice to insurer when named insured's employee does not report accident to employer. §3:17 --When is the insurance company "estopped" from claiming late notice of accident; when has the insurance company "waived" the right to demand notice of accident? §3:18 --The requirement that the insurer suffer "prejudice" before invoking the "notice of accident" clause as a defense. Notice of Suit. §3:20 -Notice of Suit. §3:21 --General. §3:22 --When is the insurance company "estopped" from claiming late notice of suit; when has the insurance company "waived" the right to demand notice of suit? Duty of Cooperation. §3:25 -Insured's Duty to Cooperate with Insurer. §3:26 --In General. §3:27 --Proof of Loss. §3:28 --Duty of Liability Insured to Cooperate in Defense of Suits. §3:30 --Insured's Duty to Give Examination Under Oath. The No-Action Clause. §3:35 The No-Action Clause. §3:36 -In General. §3:37 -Direct Actions by the Claimant Against the Insurer in a Liability Policy. §3:38 --In General. §3:39 --Waiver. §3:40 --Can the Claimant Bring a Bad Faith Action against the Insurer? §3:43 -Suits Regarding the Obligation to Defend. How the No-Action Clause Effects the Statute of Limitations. Other Insurance Clause. §3:45 The Other Insurance Clause. §3:46 -In General. §3:47 -The relationship between "primary," "excess" and "escape" type "other insurance" clauses. §3:48 -What is other "similar insurance"? Limits of Liability. §3:50 Limits of Liability (including "Set-Offs"). §3:51 -In General. §3:52 -"Per person" vs "per accident" recovery, in general. §3:53 -"Per person" vs "per accident" recovery. Coverage for derivative claims, such as wrongful death claimants or spousal loss of consortium. §3:57 -Set-off provisions which purport to reduce the damages payable under the policy by payments made by other insurers or from other sources. §3:58 --Claimed UM Coverage Set-Offs. §3:59 ---The UM/Liability coverage set-off. §3:60 ---The UM/Workers Compensation set-off. §3:61 ---The UM/Medical Payments set-off. §3:65 --Claimed Liability Coverage Set-Offs. §3:66 ---The Liability/Workers Compensation set-off. §3:67 ---The Liability/Medical Payments set-off. §3:70 --Claimed Medical Payments Coverage Set-Offs. §3:71 ---The Medical Payments/Liability Coverage set-off. §3:72 ---The Medical Payments/UM coverage set-off. §3:73 --The Medical Payments/Worker's Compensation coverage set- off. §3:75 --The Bohannan case: Reduction of Other Coverages because of Payment of Liability Insurance. §3:76 -Anti-stacking provisions. Assignment. §3:80 Assignment of Policy. Cancellation. §3:81 Cancellation and Expiration. §3:82 -In General. §3:83 -Cancellation by the Insured. §3:84 -Payment of Premium as Condition Precedent to Policy Remaining in Effect. Expiration of policy for Non-Payment. Reinstatement and the "Grace Period." § 3:85 -Return of Unearned Premiums by Insurer. §3:86 -Notice of Cancellation. Mailing and Receipt of Notice. CHAPTER 4 LIABILITY COVERAGE §4:1 Introduction. §4:2 Who the Liability Insurer owes its obligation to. Insuring Clause. §4:5 The insuring clause. §4:6 -In General. §4:7 -"Damages" or "All sums." Insurer's liability for punitive damages. §4:8 -Legal Liability. §4:9 -Bodily Injury and Property Damage. §4:10 -Arising out of the Operation, Ownership, Maintenance or Use, Loading or Unloading. §4:11 --"Arising out of." §4:12 --"Use" of a Motor Vehicle. §4:13 --"Maintenance" of a motor vehicle. §4:14 --"Ownership" of a motor vehicle. §4:15 --"Operation" of a motor vehicle. §4:20 -"Loading or unloading" as "use." Who is Covered. §4:30 Who is Covered. §4:31 -In General. §4:32 -The Named Insured, his Spouse, or "You." §4:33 -Resident Relatives or Family Members of the Named Insured. §4:34 -Use within the Scope of Consent of the Named Insured. Permissive Use. The Omnibus Clause. §4:35 --The Omnibus Clause, In General. §4:36 --Express Permission under the Omnibus Clause. "Second Permittee" Rules. §4:37 --Implied Permission under the Omnibus Clause. §4:38 --Use "Within the Scope" of Permission. The Permissive User who Deviates from the Route. §4:39 --Whether the permissive driver is "using" the vehicle within the meaning of the omnibus clause. §4:45 -Non-traditional definitions of "insured." Commercial policies. §4:50 -Exclusions of Specific Drivers, or Class or Age of Driver from the Definition of "Insured." Duty to Defend. §4:60 The Duty to Defend. §4:61 -In General. §4:62 -Control of the Defense and Settlement. §4:63 -Determining the Duty to Defend. §4:64 --In General. §4:65 --Duty Determined by the Allegations of the Petition or by the Facts Discoverable through a Reasonable Investigation. §4:66 --Determining the Obligation to Defend when Intent is an Issue. §4:67 --The Obligation to Defend "Groundless" Suits Until the Jury Determines the Facts. The Conner Case. §4:70 -The Obligation of One Insurer to Contribute to Another for the Cost of Defending their Joint Insured. §4:71 -Reservation of Rights, Non-waiver Agreements, Waiver and Estoppel and the Obligation to Defend. §4:72 -Results of a Refusal to Defend. §4:73 --Justified Refusal to Defend. §4:74 --Unjustified Refusal to Defend. §4:77 -The Continuing Duty to Defend; the Statute of Limitations. Duty to Settle. §4:80 The Duty to Settle. §4:81 -In General. §4:82 -Who has Standing to Sue and Who can be Liable. Supplementary Payments. §4:85 Supplementary Payments. §4:86 -In General. §4:87 -Postjudgment Interest. §4:88 -Prejudgment Interest. §4:89 -Expenses Incurred by the Insured for Emergency Care. Compulsory Ins. & Financial Responsibility. §4:95 Compulsory Liability Insurance, Financial Responsibility and Out of State Coverage. §4:96 -In General. §4:97 -The effect of the Financial Responsibility Laws, including the Compulsory Liability Insurance Act, on the interpretation of insurance policies. §4:98 --The effect of the FRA on policy interpretation. §4:99 --The effect of the CLIA on policy interpretation. §4:102 -The Effect of the "Financial Responsibility" and "Compulsory Insurance Law" Clause in an Auto Policy. Out of State Coverage. §4:105 Out of State Coverage. CHAPTER 5 LIABILITY COVERAGE EXCLUSIONS §5:1 Introduction. §5:2 The Household and Named Insured Exclusion. §5:3 Exclusion for "bodily injury and property damage caused intentionally by or at the direction of the insured." §5:4 Injury to Employee, Fellow Employee and Workers Compensation Exclusions. §5:5 Care, Custody or Control Exclusion, or Property Which the Insured is "In Charge Of." §5:6 Exclusion for any Person Engaged in the Automobile Business. §5:7 The "Other Business" Exclusion. §5:8 Public Livery or Conveyance; Where Passengers are Carried for Consideration or the Insured Vehicle is Rented. §5:9 Exclusion for the Towing of a Trailer. §5:10 The Named Driver Exclusion. §5:15 Other Exclusions.   CHAPTER 6 UNINSURED MOTORIST COVERAGE §6:1 Introduction. The “uninsured motorist.” §6:5 Who is an "uninsured motorist." §6:6 -The "uninsured" tortfeasor. §6:7 --In General. §6:8 --The Insolvency of the Liability Insurer can Cause the Tortfeasor to Become Uninsured. The Effect of the Guaranty Association. §6:9 --The burden of proof as to the tortfeasor's uninsured status. §6:10 --The multiple tortfeasor case. What happens, for example, when one tortfeasor is insured and the other is uninsured. §6:15 --The "underinsured" tortfeasor. §6:16 --The "hit and run" driver. The “uninsured motor vehicle.” §6:20 What can qualify as the "uninsured motor vehicle." §6:21 -In general. §6:22 -What type of vehicle must the tortfeasor be using to qualify as a"motor vehicle" for uninsured motorist coverage purposes. Definition of "motor vehicle" in §3635. §6:23 -Policy language removing certain classes of vehicles from the definition of "uninsured motor vehicle." §6:24 --Policy provisions saying that the insured or owned motor vehicle or vehicles furnished for the regular use of the named insured or any resident of the same household, can not be the"uninsured motor vehicle." §6:25 --Policy provisions saying that government owned vehicles can not be the "uninsured motor vehicle." Causation and Accident. §6:30 When is the tortfeasor operating a motor vehicle, and when is the operation of that vehicle the "cause" of the claimant's injuries? §6:31 The requirement that the insured's injury be caused by"accident." Who is an Insured Person. §6:32 Who is an Insured Person under Uninsured Motorist Coverage? Only an "insured person" under a policy can claim the right to"stack" that policy. Legally Entitled to Recover. §6:33 When is the insured "legally entitled to recover" against the uninsured motorist? Measure of Damages. §6:35 What measure of damages can be recovered against the UM carrier? §6:36 -Determining damages in relationship to available liability insurance. UM coverage as "primary." "Exhaustion" of liability coverage. §6:37 -UM coverage for Punitive Damages. §6:38 -UM coverage for Prejudgment Interest. Exclusions. §6:42 The application and validity of exclusions in a UM policy. §6:43 -In General. §6:44 -Exclusion denying coverage when the insured is struck by or occupying a vehicle owned by the insured, or a family member, but that vehicle is not insured for UM under this policy. §6:45 -Exclusion denying coverage when the insured takes a judgment against the tortfeasor, or sues the tortfeasor, without the consent of the UM insurer. The "no action" or "consent to sue" exclusion. §6:46 -Exclusion denying coverage when the insured settles with or releases the tortfeasor without the consent of the UM insurer. The "consent to settle" exclusion. §6:47 -Exclusion denying coverage if an action against the uninsured motorist is barred by the Statute of Limitations. §6:48 -Exclusion denying coverage for punitive damages assessed against the tortfeasor. Limits of Liability. §6:55 Limits of Liability. §6:56 -In General. §6:57 Conformity to Financial Responsibility Limits of other State when accident occurs outside of Oklahoma. The "out-of-state" coverage provision. §6:58 -Set-off provisions which purport to reduce the damages payable under the policy by payments made by other insurers or from other sources. §6:59 --The Liability Coverage set-off. §6:60 --The Workers Compensation set-off. §6:61 --The Medical Payments set-off. Other Insurance and “Stacking.” §6:70 The Other Insurance Clause. "Stacking" of UM coverages, and the "exhaustion" requirement. §6:71 -In General. §6:72 -Stacking. Keel v MFA, and the general rule. §6:73 -Stacking. Intra-policy vs. inter-policy stacking. §6:74 -Stacking. Limitations found in the "Limits of Liability" section. §6:75 -Stacking. Before policies will be "stacked," the injured claimant must be a defined "insured" on each policy. Stacking for guest passengers. §6:76 -Stacking. Stacking of UM and Liability Coverage. §6:77 -Stacking. Fleet stacking. §6:78 -The Limits of Stacking: The Payment of a Single Premium for coverage of Multiple Vehicles. §6:79 -Requirements that the tortfeasor's liability insurance be "exhausted by payment" before the UM coverage is payable. §6:80 -Primary UM vs Excess UM The valid application of the "Other Insurance" provision and of the "exhaustion" requirement. Arbitration. §6:85 Arbitration in Uninsured Motorist Policies. Practice and Procedure. §6:90 Practice and Procedure in UM cases. §6:91 -The insured's litigation alternatives in using the courts. Joinder of parties, intervention by the insurer, and getting a binding judgment against the insurer on the issues of tort liability and damages. §6:92 --Introduction. §6:93 --An historical perspective. §6:94 --Keel v MFA and the four alternatives. §6:95 --The UM Insurer's Right to Keep Itself Out of the Courtroom. Agreeing to be "bound by the verdict." Subrogation and Trust Agreement. §6:100 Subrogation and the Trust Agreement. §6:101 -In General. §6:102 -The destruction of subrogation rights by the insured's settlement with the tortfeasor. The "Porter Doctrine." §6:103 -Limitations on the UM insurer's right to assert subrogation. §6:104 -The Problem with "Porter Releases"; the UM insurer's refusal to waive subrogation rights and the dilemma thereby created. §6:105 -Protection of subrogation rights using the "substitute payment" provisions of §3636(E). What happens when the tortfeasor's liability insurer offers to pay liability limits. §6:106 -Subrogation and the Statute of Limitations problem. Offer and Rejection of UM. §6:115 The Creation of the Contract. Mandatory Offer, Rejection, and Related Issues. §6:116 -In General. §6:117 -The Required Offer of UM Coverage. What Types of Insurers Must Offer UM. §6:118 -The Required Offer of UM Coverage. What Form Must it Be In? What is a Sufficient Offer? §6:119 -The Required Offer of UM coverage. What Happens if the Offer is Not Made, or a Proper Rejection not Taken? §6:120 -Is a Written Rejection of the Optional "Higher" Limits Required? §6:121 -When is a new offer or rejection necessary? §6:122 -Who must sign the rejection form? Other Issues. §6:130 Other Issues. §6:131 -Choice of Law. §6:132 -Hospital and Physician's Liens. §6:133 -Subrogationby other insurers against their insured's Uninsured Motorist recovery. CHAPTER 7 MEDICAL PAYMENTS §7:1 In General. §7:2 Occupancy. §7:3 Accident. §7:10 Subrogation and Set-off. §7:11 -Subrogation. §7:12 -Set-off. §7:15 Stacking. §7:16 Who is Entitled to Payment of Proceeds. CHAPTER 8 PROPERTY COVERAGES §8:1 The different types of coverages. §8:2 -Fire policies. §8:3 -Theft policies. §8:4 -Collision coverage. §8:5 -Comprehensive coverage. §8:7 Determining what is a covered loss. §8:8 -What is covered under a Comprehensive coverage. §8:9 -What is a "theft." §8:10 --Present intent to steal. §8:11 --Loss of vehicle to someone claiming title. §8:12 --When the criminal obtains possession by false pretenses (or the insured voluntarily gives up. §8:13 --Mysterious Disappearances. §8:20 -What is a "collision," "upset," "falling object," "windstorm," or other losses covered under the collision coverage. §8:25 The Measure of Damages. Limits of Liability; Actual cash value; repair; delay, etc.. §8:26 -In General. §8:27 -Payment and Determination of Actual Cash Value. §8:30 -Cost of Repair. When is a vehicle not repairable (or "totalled")? §8:31 -Actual cash value of vehicles held for sale. §8:32 -The Insurer's Option to Repair. §8:33 -Other Damages Recoverable. §8:40 Other Problems. §8:41 -Insurable Interest. §8:42 -Assignment of Policy and change of ownership of vehicle. §8:43 -Formal proof of loss. §8:44 -The Insured's Obligation to Preserve and Protect the Vehicle. §8:45 -The Loss Payable Clause. §8:50 -Personal property within the insured vehicle. §8:51 -The use and coverage of non-owned vehicles. §8:52 -The "No Benefit to Bailee" Clause. §8:53 -Appraisal.