67 N.Y.2d 823 (1986)
When the language of an insurance policy exclusion is ambiguous, and the insurer uses different prepositions (such as “away from” versus “on”) within the same policy to define the scope of exclusions, the ambiguity should be construed in favor of the insured.
Summary
Fenton York sustained injuries when an unregistered vehicle located partially on his property rolled and struck him. Sterling Insurance denied coverage under York’s homeowner’s policy, citing an exclusion for injuries arising from the use of unregistered vehicles “away from” the residential premises. The New York Court of Appeals affirmed the Appellate Division’s decision, holding that “away from” did not have the same meaning as “off” the premises, especially given the policy’s separate exclusion for unregistered vehicles requiring the injury to occur “on” the premises. This demonstrated that the insurer itself distinguished between the terms, leading the court to resolve the ambiguity in favor of coverage for the insured.
Facts
Fenton York was injured when an unregistered vehicle, situated partially on his residential property, rolled and struck him.
York had a homeowner’s insurance policy with Sterling Insurance Company.
The policy contained an exclusion for bodily injury arising out of the ownership or use of an unregistered vehicle “away from” the residential premises.
Another exclusion in the policy regarding unregistered vehicles stated the injury must occur “on” the residential premises.
Procedural History
York filed a claim with Sterling Insurance, which was denied based on the policy exclusion.
York sued Sterling Insurance seeking coverage.
The trial court ruled in favor of Sterling Insurance.
The Appellate Division reversed, finding the exclusion inapplicable.
Sterling Insurance appealed to the New York Court of Appeals.
Issue(s)
Whether the phrase “away from” the residential premises, as used in the homeowner’s insurance policy, is ambiguous when applied to the circumstances where the injury occurred partially on the insured’s property.
Whether the insurer’s use of both “away from” and “on” in different exclusions within the same policy creates an ambiguity that should be construed against the insurer.
Holding
Yes, because in the context of the policy and the circumstances of the injury, the phrase “away from” is uncertain and open to interpretation.
Yes, because the carrier itself distinguished between “on” and “away from” in the policy, which creates an ambiguity that must be construed against the insurer.
Court’s Reasoning
The court reasoned that the precise meaning of “away from” is not clear-cut when applied to a situation where the vehicle was partially on the insured’s property. Because the injury occurred in a gray area, the court had to interpret the policy language.
The court emphasized that the insurance company itself used different language (“on” versus “away from”) in crafting the policy’s exclusions. This demonstrated that the insurer recognized a distinction between the two phrases. As the court stated, “because the unregistered vehicle exclusion was written to require that the injury occur ‘on’ the residential premises, showing that the carrier itself distinguished between ‘on’ and ‘away from’.”
When an insurance policy contains ambiguous language, the established legal principle is that such ambiguity should be construed against the insurer, who drafted the policy. This is because the insurer has the opportunity to be clear and specific in its policy language. The court found the Appellate Division didn’t err in holding the exclusion inapplicable, favoring coverage for the insured.
No dissenting or concurring opinions were mentioned.