Holden v. Aetna Casualty & Surety Co.

PER CURIAM: In this appeal from the Superior Court, we again confront the question of the validity of a provision in an automobile insurance policy which excludes coverage for injuries sustained by an insured while occupying, or when struck by, a motor vehicle not listed in the policy. In Frank v. Horizon Assur. Co., Del.Supr., 553 A.2d 1199 (1989), we ruled that “other motor vehicle (OMV)” exclusions are contrary to public policy and thus invalid as a matter of law. The appellant, Aetna Casualty and Surety Company (“Aetna”), although conceding that the OMV exclusion in its policy has the same import as the exclusion invalidated in Frank, seeks to distinguish Frank by contending that the exclusion under review is directed to underinsured coverage, while Frank invalidated an exclusion for uninsured coverage. Aetna contends that uninsured motorist coverage is statutorily mandated by 18 Del. C. § 3902(a)(1), unless “rejected in writing”, but that section 3902(b) requires only that the “insurer offer to the insured the option” to purchase underin-sured coverage. The Superior Court agreed with this argument in ruling in favor of Aetna. We view the uninsured/underinsured distinction of no consequence in the light of our holding in Frank that optional coverage may be waived or rejected by the insured but, if purchased, such coverage cannot be eroded by hypertechnieal exclusions which lack express statutory authority. Frank v. Horizon Assur. Co., 553 A.2d at 1203. As we also noted in Frank, the public policy underlying section 3902 is achieved by making available uninsured coverage which “mirrors” liability insurance. Id. at 1205. This Court has previously held that underinsured coverage is merely a form of uninsured coverage. Home Ins. Co. v. Maldonado, Del.Supr., 515 A.2d 690, 696 (1986). Since this case raises the same considerations of public policy, we find it fully controlled by our decision in Frank v. Horizon Assur. Co. ****** The decision of the Superior Court is REVERSED.