Automobile insurance policies generally cover a wide array of accidents and incidents that may occur while an individual is in a vehicle. They can cover injuries or damages that result to the driver and passenger of the vehicle that is insured, or the injuries of another individual or driver caused by the malfunction of the vehicle or the negligence of the driver who is covered. What is less well known is that, in some instances, auto insurance policies even provide coverage for the defense of claims arising out of an automobile accident. Plaintiffs asserting claims against defendants arising from automobile accidents must be careful to consider whether insurance companies may play a role in finding counsel for a defendant, or if reimbursement for litigation expenses from insurance could have an impact on a defendant’s willingness to settle.
One recent case to look at the scope of litigation defense insurance is Allstate Insurance v. Brady. In this case, Allstate Insurance sought a declaratory judgment from the Northern District of West Virginia that it was not required to pay for the defense of defendants who killed another individual while using an Allstate insured vehicle. In that case, Jody Hunt shot and killed two individuals, Jody Taylor and Douglas Brady, after a dispute. In order to commit the crime, she drove to Brady’s place of business in a truck that was insured by Allstate. She then drove to Taylor’s home, where she shot him while she was sitting in the truck. The personal representative of Brady and Taylor’s estates later filed wrongful death actions against Hunt, and Allstate sought to determine whether it was required to defend Hunt against these wrongful death claims.