Technical terms in the fine print of an insurance policy are often critical to understanding the insured’s rights. These terms often have definitions that differ from the normal dictionary definition. In one case, for instance, a court ruled that school busses are not automobiles under a particular insurance policy. The recent ruling in McLaughlin v. Travelers Commercial Insurance Company is such a case.
In McLaughlin, the Washington State Supreme Court ruled that a bicyclist was a “pedestrian” under McLaughlin’s insurance policy. McLaughlin was riding his bicycle in downtown Seattle when a motorist opened the door of a parked vehicle and hit McLaughlin. McLaughlin made a claim under his Travelers car insurance policy. The policy provided benefits if McLaughlin was struck by a vehicle “as a pedestrian.”
Travelers denied coverage. It argued that McLaughlin was not a “pedestrian” because he was riding his bike. The lower courts agreed with Travelers, relying on the dictionary definition of “pedestrian” as excluding bicyclists.
The Washington State Supreme Court held that McLaughlin had coverage. The court relied on an insurance statute in which the Washington legislature defined a “pedestrian” as any person “not occupying a motor vehicle…” Since McLaughlin was riding a bike and not a motor vehicle when he was injured, he was a “pedestrian”.
The court emphasized that the relevant statutes are read into insurance contracts automatically. Because the legislature has the power to regulate insurance, a valid statute becomes part of the insurance policy. The statutory definition of “pedestrian” therefore became a part of McLaughlin’s insurance policy just as if Travelers had copied the statute into the policy documents.
This conclusion was reinforced by traditional insurance law principles that insurance policy language should be read consistent with the expectations of the average insurance purchaser. The court had no trouble concluding that the average person buying this MedPay coverage would expect to be covered when injured by a car.
Another twist is that the Court applied Washington law even though McLaughlin bought the policy in California. Because he had moved to Washington, the Court determined that he was entitled to all the protections of Washington law. Washington courts have a long history of applying Washington law to any insurance policy protecting a Washington resident.
In sum, the McLaughlin case is a strong reminder that Washington State’s insurance laws and regulations will be enforced regardless of the insurance policy fine print.