1. INSURANCE — Terms of Policy — Plain and Unambiguous — Court — May Not Rewrite — Not Limit by Implication. The general rule in enforcing the terms of an insurance policy is that where the terms of the contract are plain and unambiguous, the court may not rewrite the contract between the parties, nor limit by implication or construction the effect of the contract as written.
Opinion by JUDGE PIERCE.
This case arises out of an accident which occurred when defendant Bruce Shupe was operating a vehicle owned by his father, Burrell Shupe. The accident resulted in the death of Joseph Urtado, the husband and father of plaintiffs. The issue before us concerns the coverage extended by an insurance policy issued in Burce's name by defendant Allstate Insurance Company. Allstate claims that the policy in question does not extend coverage to Bruce because, (1) the automobile involved was neither an owned nor a non-owned automobile within the definition of those terms in the policy, and (2) the automobile was being operated in Bruce's business or occupation at the time of the accident. The trial court granted Allstate's motion for summary judgment on the grounds that the automobile was not a non-owned automobile as defined by the policy. We affirm.
The policy issued to Bruce states that the named insured is insured with respect "to the owned or a non-owned automobile' and defines a "non-owned automobile" as one "not owned by the named insured or any relative" (emphasis added) of the named insured. The term "relative" is further defined in the policy as "a relative . . . who is a resident of the same household" as the named insured.
It is not contested that the automobile involved was owned by Bruce's father and that Bruce and his father resided in the same household. Plaintiffs' argument is essentially that the unusually restrictive definition of a non-owned automobile operates as an exclusion from the broad coverage of the policy and that it should have been delineated as an exclusion in order to make clear the coverage of the policy. They further argue that the limitation imposed by the definitions should not be enforced on the grounds that it is contrary to the public policy of this state and in violation of the Motor Vehicle Financial Responsibility Act, C.R.S. 1963, 13-7-1 et seq.
[1,2] The general rule in enforcing the terms of an insurance policy is that where the terms of the contract are plain and unambiguous, the court may not rewrite the contract between the parties, nor limit by implication or construction the effect of the contract as written. Massachusetts Mutual Life Insurance Co. v. DeSalvo, 174 Colo. 115, 482 P.2d 380; 7 Blashfield Automobile Law and Practice § 292.2 (F. Lewis ed. 1966). Furthermore, the provisions of an insurance policy cannot be read in isolation, but must be read as a whole. Coxen v. Western Empire Life Insurance Co., 168 Colo. 444, 452 P.2d 16. In this case, the language of the definitions is clear and unambiguous when those definitions are read together, and they must therefore be enforced as written. While the insurer had a duty to state limitations on coverage in a manner clearly designed to apprise the insured coverage in a manner clearly designed to apprise the insured of its effect, it is not necessary that all limitations appear as exclusions from coverage. State Farm Mutual Insurance Co. v. Flynt, 17 Cal. App. 3d 538, 95 Cal. Rptr. 296. Definitions of terms used in the insuring clause frequently have the effect of defining, and therefore limiting, coverage. The definitions in question in this case appear on the same page of the policy, under the headings, "Definitions of Words Used Under This Part" and in smaller, but boldface print, "Important Words Explained." These headings were conspicuous and the definitions easily readable by the insured.
Plaintiffs further argue with respect to the "non-owned automobile" clause that the definitions unreasonably restrict the coverage of the policy, are contrary to the public policy of this state, and are in violation of the Motor Vehicle Financial Responsibility Act, supra. The provisions of the policy in question is essentially the "drive other cars" provision, commonly found in automobile liability policies. The purpose of such provisions has been to protect the insurer from a situation where the insured pays for one policy but receives coverage while driving, on a regular basis, automobiles owned by other members of his family. See Hayes v. Fireman's Fund Insurance Co., 170 Colo. 164, 460 P.2d 225.
[3] In the policy before us, Allstate has chosen to further restrict the definition of a non-owned automobile so that it does not include an automobile owned by a relative residing in the same household, whether or not the automobile is furnished for the regular use of the insured. We find no public policy in this state which would require us to render the definitions in this policy unenforceable on the grounds asserted. Nor can we say that the resulting limitation is unconscionable on its face.
[4] Finally, it is well established that the provisions of the Motor Vehicle Financial Responsibility Act do not come into play until the insurance policy has been certified as proof of financial responsibility. American Service Mutual Insurance Co. v. Parviz, 153 Colo. 490, 386 P.2d 982; Western Mutual Insurance Co. v. Wann, 147 Colo. 457, 363 P.2d 1054.
Since we hold that the policy in this case did not extend coverage to the insured when he was operating a vehicle owned by his father, who resided in the same household, it is unnecessary for us to address the "business or occupation" exception also relied on by Allstate.
Judgment affirmed.
JUDGE RULAND concurs, JUDGE COYTE dissents.