Exclusions from Uninsured Motorist Coverage in Pennsylvania Policy Unenforceable in New York

The Second Department determined the exclusions from uninsured motorist coverage in a Pennsylvania policy violated New York public policy and the insurer was obligated to provide $300,000 of uninsured motorist coverage:

“[I]nsurance policies, like all contracts, should be enforced according to their terms unless they are prohibited by public policy, statute or rule” … . “If an attempted exclusion is not permitted by law, the insurer’s liability under the policy cannot be limited” … . Here, the exclusions contained in the uninsured motorist coverage endorsement of Progressive’s Pennsylvania policy are not permitted by New York law. “Insurance Law § 3420(f)(1) requires that every automobile insurance policy contain an uninsured motor vehicle endorsement. Neither that statute nor any regulations applicable to it mentions any exclusions” … . Since the exclusions are “without the approval or protection of the law” …, they should not be given effect … .

Since we have determined that the underlying exclusions are invalid, and the policy does not contain a term expressly limiting coverage to the statutory minimum, no such limitation will be read into the policy … . Consequently, Progressive’s policy must be read as affording uninsured motorist coverage up to its stated limit of $300,000. Braithewaite v Progressive Cas. Ins. Co., 2015 NY Slip Op 02717, 2nd Dept 4-1-15