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S.C. FARM BUREAU INS. CO. v. MUMFORD6/26/1989
al Insurance Company v. Roberts, 261 N.C. 285, 134 S.E.2d 654 (1964), also supports our conclusion. In that case, the Court held that a North Carolina statute, identical in wording to South Carolina's, required the insurer to cover injuries to a third party intentionally inflicted by the insured through use of his automobile. Because it conflicted with the statute, an exclusion clause in the insurance policy was held to be unenforceable against the injured third party. We find the Roberts decision especially persuasive because our Legislature has directed us to construe the South Carolina Act so as to make uniform the laws of those states which enact substantially identical legislation. Section 56-9-120, Code of Laws of South Carolina, 1976.
Relying on Pennsylvania National Mutual Casualty Insurance Company v. Dawkins, 551 F. Supp. 971 (D.S.C. 1982), South Carolina Farm Bureau argues that the Financial Responsibility Act requires only that "accidents" be covered by a third party liability insurer. The Bureau contends that reasonable exclusionary clauses which do not conflict with the plain wording or legislative purpose of the Act are permissible. Moreover, it asserts that to invalidate an "intentional acts" exclusion in the insurance contract violates the well established public policy that prohibits persons from insuring themselves against their own intentionally harmful acts.
These arguments overlook both the actual wording of the statute and a critical distinction between voluntary insurance and compulsory insurance.
The statute does not say insurers must cover "accidents" arising from the use of the insured vehicle; it says they must cover "liability imposed by law" on the insured. The only place the word "accident" appears in the statute is in a later clause limiting the amount of compulsory coverage to certain dollar limits "in any one accident." In this context, the word "accident" simply means "occurrence." Nationwide Mutual Insurance Company v. Roberts, supra. Since the Act mandates coverage if the law imposes liability for damages on the at fault insured, the exclusionary clause conflicts with the plain wording of the Act.
The exclusion also conflicts with the legislative purpose of the Act. Insurance against third party loss arising out of the use of a motor vehicle is compulsory under South Carolina law. See Sections 56-10-10 and 56-10-20, Code of Laws of South Carolina, 1976, as amended. The primary purpose of compulsory insurance is to compensate victims who have been injured by at fault motorists, not, like that of voluntary insurance, to save harmless the insured himself. Nationwide Mutual Insurance Co. v. Roberts, supra. Accordingly, the victim's right to recover from the insurance carrier does not
The principle that one should not be permitted to insure against his own intentional wrongdoing applies to voluntary insurance, not compulsory insurance. Where the Legislature makes coverage compulsory, instead of leaving it to the voluntary market, it has already balanced the public interest in prohibiting insurance for intentionally harmful acts against the public interest in compensating the victims of at fault motorists. By making coverage compulsory, it chooses to weigh the latter interest more heavily than the former. Once the Legislature has made that choice, there is no room for the courts to impose a different judgment based upon their own notions of public policy.
For the reasons stated, the judgment of the circuit court is
Reversed.
SHAW and GOOLSBY, JJ., concur.
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