What Does the Term Each Accident Mean in an Insurance Policy?

We took in a case the other day where a drunk driver hit our clients and then went 3 miles down the road and hit another vehicle. When we demanded the policy limits of $50,000 per person for our two clients (total of $100,000 for each accident under policy language), State Farm responded that it would tender the $100,000 limits to our two clients and to the third person, to be divided however. There are two huge problems with them doing this. Start with their assumption that the second accident three miles down the road is not a separate accident triggering an entire other silo of $50,000/$100,000 in coverage.

As with all insurance contract analysis, we analyze it under its own contract language. Fortunately, Georgia Appellate Courts have already answered this question when it was posed by the Middle District.

“(H)ow to determine the meaning of the term “accident” in an automobile liability insurance policy when the word is not expressly defined in the policy and, more specifically, how to determine if there has been one accident or two when an insured vehicle strikes one claimant and then very shortly thereafter strikes another.” State Auto Prop. & Cas. Co. v. Matty 286 Ga. 611 (2010).

In that appellate case, there were two bike riders that were struck by a driver. One was hit and then a second or two later, another one was hit. The Plaintiff wanted to have it so that each rider could access $100,000 from the $100,000 single limit policy. Otherwise, they would be fighting over one silo of $100,000.

Following the rules of contract language construction, the Court looked first at Georgia Code and that definition of accident said it was an event, so then to the dictionary to define an event as “a phenomenon or occurrence located at a single point in space-time,” The American Heritage Dictionary of the English Language (4th ed.2006).  The Plaintiffs argued from this that there were two events, two accidents.

The Court disagreed noting, “Automobile accidents involving multiple vehicles and multiple injured parties (insureds and third parties) are an everyday occurrence on our roads. Recognizing this reality, this contractual language contemplates that there can be a single accident in which there are multiple vehicles, injured parties, and claims and provides that for that type of accident, there will be a liability limit of $100,000.”
State Auto Prop. & Cas. Co. v. Matty, 286 Ga. 611 (2010)

The Court went on to announce that Georgia would follow the “cause theory” from then on. “Under this theory, the number of accidents is determined by the number of causes of the injuries, with the court asking if “`”there was but one proximate, uninterrupted, and continuing cause which resulted in all of the injuries and damage.”‘” Appalachian, 676 F.2d at 61 (citations omitted). In the context of vehicle accidents involving multiple collisions that do not occur simultaneously (recognizing that it is almost impossible that such collisions can occur without any difference in time and place), courts look to whether, after the cause of the initial collision, the driver regained control of the vehicle before a subsequent collision, so that it can be said there was a second intervening cause and therefore a second accident.”
State Auto Prop. & Cas. Co. v. Matty  286 Ga. 611 (2010)

Accordingly the bike riders lost their argument and coverage in the desired amount. In our case, the facts are in our client’s favor. The drunk recovered control and drove several miles before committing another negligent act. There is no doubt that our clients were in one accident and the other accident was separate, triggering separate policy limits.