Ky. Supreme Court Rules on Parental Consortium Claims

The Kentucky Supreme Court unanimously ruled in Daley v. Reed recently that a claim for loss of parental companionship and services is payable under the “each person” limit, not the “each accident” limit, of an auto liability policy, according to the National Association of Independent Insurers (NAII).

“In reinstating the trial court’s opinion, the Supreme Court’s decision reassures property and casualty insurers that the terms and conditions of their insurance policies will be valid and enforceable except under the most unusual circumstances,” said NAII counsel Robert Hurns.

“If the Court of Appeals decision would not have been reversed, the insurance industry would have been left in a situation in which its exposure in any case involving wrongful death could have doubled or tripled despite well-established policy language that sets specific, unambiguous liability limits.”

In this case, Robin Reed was killed in 1997 when the vehicle she was operating was struck from the rear by a vehicle owned and operated by John Daley. Reed’s husband, James, filed a wrongful death action against Daley, seeking damages for loss of parental consortium for the Reeds’ four minor children among other payments. The trial court held that the children’s claims fell within the “each person” coverage of Allstate’s policy. The Court of Appeals reversed that decision, ruling that the auto insurers could not limit its bodily injury liability exposure to the “each-person” coverage limits, and that the claims were applicable to the policy’s “each accident” coverage limits.

In reversing the Court of Appeals ruling, the Supreme Court noted that virtually every jurisdiction that has addressed this issue concluded that loss of consortium is not a separate “bodily injury,” but is derivative of the injured party’s bodily injury claim. Therefore, a claim for loss of parental consortium falls within the “each person” limit of a policy’s coverage.

“Under Daley’s Allstate policy,” the Supreme Court wrote,” damages arising out of bodily injury to one person in any one motor vehicle accident, including damages sustained by anyone else as a result of that bodily injury, fall within the coverage limit for each person. Damages for wrongful death and damages for loss on consortium derive from the same injury.”

“When an insurance policy is clear and unambiguous, the insurance policy must be enforced as written,” Hurns said.

“The Allstate policy at issue is certainly not vague and has been interpreted by multiple jurisdictions to limit claims for loss of parental consortium to the per-person limits of coverage,” he added. “The Supreme Court’s decision enables insurance carriers to rely upon the terms, conditions, validity and enforceability of their automobile liability policy provisions long accepted in the state.”