Motor vehicle insurance coverage and criminal acts

Mark Gordon Governor THE STATE OF WYOMING D ep artme nt of I ns ura nc e 106 E. 6th Ave. . Cheyenne, Wyoming 82002 BULLETIN NO. IO.2O24 All Interested Parties --'2 Jeffrey P. Rude, Wyoming Insurance Commissioner JC- October 18,2024 Motor vehicle insurance coverage and criminal acts Jeffrey P. Rude Commissioner TO: FROM: DATE: SUBJECT: Pursuant to W.S. $ 3l -9-405, every motor vehicte liability policy is subject to certain statutory provisions which need not be contained in the actual policy language. Specifically, W.S. $ 3 I -9-405(0 states as follows: (i) The liability of the insurance carrier with the respect to the insurance required by this act shall become absolute whenever injury or damage covered by the motor vehicle liability policy occurs. The policy may not be cancelled or annulled as to the liability by any agreement between the insurance carrier and the insured after the occurrence ofthe injury or damage. No statement made by the insured or on his behalfand no violation ofthe policy shall defeat or void the policy[.] A common policy provision excludes coverage for liability resulting from criminal acts. The assumption is that this policy exclusion is included due to the general public policy ofnot indemnifring individuals tbr criminal acts. The Department is aware of insurers attempting to deny liability coverage as a policy exclusion in circumstances where the insured caused injury or damage to uninvolved third parties while operating a motor vehicle in commission or furtherance of a criminal act. However, the plain language olW.S. g 3l-9-405 is clear: the insurer's responsibility regarding liability coverage as to the innocent third party is absolute and may not be denied or modified once liability has been incurred. This position is based on not only the plain language of W.S. $ 3 I -9-405(f), but also upon consideration ofthe public policy ofprotecting innocent third parties. It is understood that the above position may have an initial economic consequence for insurers because they are statutorily required to pay for injuries and damages that may be otherwise contractually excluded in the policy. However, pursuant to W.S. $ 3l-9-405(h), any motor vehicle tiability policy may provide that the insured shall reimburse the insurance carrier lbr any payment the insurance carrier would not have been obligated to make under the terms ofthe Administration (307)'7'7'7-1401 'Fax(30'l\77'7-2446'hnps://doi.wyo.gov/'Licensing(307)7'17-7319'ConsumerAftairs(307\'177-7402 policy except lbr the provisions olthis act [the Motor Vehicle Safety-Responsibility Act, W.S. $ 26-9-101 er.req.]. This language allows the insurance carrier to recover from the insured in the event liability coverage is mandated pursuant to W.S. S 26-9-405(f). The Department's interpretation of the mandatory coverage provisions of W.S. $ 26-9-405(D is that the requirement is satisfied upon payment of the statutory minimum insurance requirements identified in W.S. $ 3l-9-40s(bxii). Ifthere are questions regarding the above, please feel free to contact the Department Stalf Attomey at the Department main telephone number (307) 777-7401. 2