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COMMISSIONER'S BULLETIN # B-0004-01

February 05, 2001


To: ALL INSURANCE COMPANIES, CORPORATIONS, EXCHANGES, MUTUALS, RECIPROCALS, ASSOCIATIONS, LLOYDS, OR OTHER INSURERS WRITING AUTOMOBILE INSURANCE IN THE STATE OF TEXAS AND TO THEIR AGENTS AND REPRESENTATIVES AND THE PUBLIC GENERALLY


Re: INTERPRETATION OF "ACCIDENT" IN AUTOMOBILE INSURANCE POLICIES AND ENDORSEMENTS

The purpose of this bulletin is to reiterate the position of the Texas Department of Insurance (Department) regarding use of the term "accident" and some of its variations in automobile policies and endorsements adopted by the Commissioner pursuant to the Insurance Code, Article 5.06.

The Department´s position is that auto policies and endorsements referring to "an accident," "the accident," "motor vehicle accident," or "auto accident" mean the same as if the word "occurrence" were substituted for the word "accident." The word "accidental" means the same as "unintentional." None of the above words are limited to a collision unless expressly stated to mean that by the policy or endorsement.

On August 8, 1980, the State Board of Insurance (Board), which was the predecessor of the Department, adopted the Texas Personal Auto Policy for inclusion in the Texas Standard Provisions for Automobile Insurance Policies. In Board Order No. 37691, the Board stated that "unless the Texas Personal Auto Policy has clearly changed the scope and nature of a coverage from that provided by the Family Automobile Policy, the courts should be guided by prior decisions construing the provisions of the Family Automobile Policy." The Board also stated:

Further, the Family Automobile Policy, which is being replaced by the Texas Personal Auto Policy, used the terms "accident" and "occurrence" somewhat interchangeably. The Texas Personal Auto Policy uses the term "accident" exclusively. The State Board of Insurance has consciously and deliberately chosen to use the term "accident" in the Texas Personal Auto Policy exclusively.

Since the terms "accident" and "occurrence" as used in the Family Automobile Policy are virtually synonymous and further the term "accident" is more readily understood by the general public, no change in the various coverages of the Texas Personal Auto Policy is intended by this choice.

Similarly, the Texas Personal Auto Policy defines "occupying" to mean "in, upon, getting in, on, out or off." Medical Payments (MP), Personal Injury Protection (PIP), and Uninsured/Underinsured Motorists (UM/UIM) Coverages in that policy all use the word "occupying" in defining "covered person." Similar wording is found in commercial auto endorsements TE 04 01C (PIP), TE 04 09D (UM/UIM), and TE 99 03B (MP). By contrast, it should be noted there is a provision in UM/UIM coverage that requires a hit and run vehicle to hit a vehicle or person for coverage to apply.

Insurers are responsible for reviewing their claims adjusting procedures to ensure that they are adjusting claims in compliance with policy terms. Questions regarding this bulletin may be directed to Grover Corum, Manager, Automobile/Homeowners Division at (512) 322-3430 or Grover.Corum@tdi.state.tx.us.

Marilyn Hamilton
Associate Commissioner
Property And Casualty Program




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