Where the teenage daughter of the holders of an excess insurance policy suffered damages allegedly exceeding $2,500,000 while riding as a passenger in a golf cart, the excess policy’s exclusion for injured family members does not violate Massachusetts public policy, but the policyholders are entitled to underinsured motorist coverage.
Affirmed in part and reversed in part.
“The defendants/plaintiffs-in-counterclaim, Callie, Lisa, and Scott Hilinski (Hilinskis), appeal from a judgment (1) in favor of the plaintiff, Privilege Underwriters Reciprocal Exchange (Privilege), on its complaint for declaratory relief and (2) against the Hilinskis on their counterclaims for declaratory relief and breach of contract. The appeal raises two issues regarding the personal excess liability policy (excess policy) held by the Hilinskis. First, does an exclusion in the excess policy for liability claims by injured family members violate Massachusetts public policy? Second, does the nonstandard follow-form provision in this excess policy operate to limit underinsured motorist coverage (UIM coverage) under the excess policy by incorporating limitations or exclusions applicable to UIM coverage in the underlying automobile policy (auto policy)? As discussed further herein, the general purpose of a follow-form provision in an excess insurance policy is to incorporate language from an underlying insurance policy. On the first issue, we agree with the judge that the excess policy’s exclusion for injured family members does not violate Massachusetts public policy and that it is the province of the Legislature and Commissioner of Insurance to determine whether such exclusions should be allowed. On the second issue, we conclude that the Hilinskis are entitled to UIM coverage under Privilege’s excess policy because the particular follow-form provision in that policy does not clearly and unambiguously incorporate UIM coverage limitations or exclusions from the auto policy. …
“In 2018, Lisa and Scott’s teenage daughter Callie suffered a severe knee injury while riding as a passenger in a golf cart owned by Scott and driven by Callie’s friend, defendant Audrey Connelly. The Hilinskis alleged that Callie’s damages exceed $2,500,000. At the time of the accident, they held an auto policy and excess policy from Privilege. The auto policy provided $250,000 in bodily injury coverage and $250,000 in UIM coverage. The excess policy provided $10,000,000 in excess liability coverage and $1,000,000 in excess UIM coverage. A claim was submitted on Callie’s behalf to Privilege. Privilege offered $250,000, the bodily injury liability limit under the auto policy, to settle Callie’s claims but denied that there is excess liability coverage under the excess policy or UIM coverage under either policy. …
“We agree with the judge’s conclusion that the excess policy’s exclusion for injured family members does not violate Massachusetts public policy. There is no State law, and therefore no public policy arising from that law, that prohibits the exclusion in umbrella or excess insurance policies. In the context of homeowners’ insurance, we have held that the exclusion of claims against an insured for the injury of a household member does not violate public policy. … Nor is allowance of an exclusion for injured family members arbitrary, unfair, or unconscionably one-sided. … It is ultimately the responsibility of the Legislature and Commissioner of Insurance to determine whether such exclusions should be allowed after considering the full range of interests implicated, including the validity of any ‘apprehension of insurers about the scope and profusion of intrafamily claims’ and ‘the added exposure, were the exclusion to be scuttled, and with what practical effect on the premiums charged.’ …
“In the alternative, the Hilinskis argue that, even if there is no excess liability coverage to cover Callie’s claim, she is entitled to UIM coverage under the excess policy. …
“… Because few purchasers of automobile insurance and liability policies come with a prior understanding of follow-form provisions and how they are supposed to work, it is essential that such a provision explain in a clear and unambiguous manner how the excess policy incorporates coverage limitations or exclusions in the underlying policy. The follow-form provision in Privilege’s excess policy fails to do so with respect to limitations and exclusions in the auto policy’s UIM coverage.
“Accordingly, we conclude that the excess policy is ambiguous as to whether it incorporates limitations on what constitutes an ‘underinsured motor vehicle’ in the auto policy’s UIM coverage. Because that ambiguity must be resolved against Privilege, the company that drafted the policy, and in favor of the Hilinskis, … and because Privilege has not asserted any other ground for denying UIM coverage under the excess policy, Callie’s claim for such coverage should not have been denied. …
“So much of the judgment in favor of 16 Privilege and against the Hilinskis as denied Callie’s claim for liability coverage under the excess policy is affirmed. So much of the judgment in favor of Privilege and against the Hilinskis as denied Callie’s claim for UIM coverage under the excess policy is reversed. A new judgment shall enter declaring that the Hilinskis are entitled to UIM coverage under the excess policy for Callie’s injuries.”
Privilege Underwriters Reciprocal Exchange v. Hilinski (Lawyers Weekly No. 11-016-24) (19 pages) (Toone, J.) The case was heard by Maynard M. Kirpalani, J., on motions for summary judgment; a motion for reconsideration was considered by him; and the entry of separate and final judgment was ordered by Michael A. Cahillane, J., in Superior Court. James J. Crowley Jr. for the defendant; John A. Donovan III (Emily K. Zwerman also present) for the plaintiff (Docket No. 24-P-55) (March 18, 2025).