Abstract

In March, 1963, the Arizona Supreme Court handed down a decision which in its sweeping terms may have changed the entire field of automobile liability insurance underwriting in Arizona. In Jenkins v. Mayflower Ins. Exch., 93 Ariz. 287, 880 P.2d 145 (1963), which involved an action by judgment creditors of the insured against the automobile liability insurer, the court held that the omnibus clause prescribed in the Financial Responsibility Act' is a part of every motor vehicle liability policy, and thus the insurer could not set up the defense of a restrictive endorsement, negating coverage if the automobile was operated by a member of the armed forces other than the named insured.

The total import of the decision is not readily apparent. It does say that anyone who drives an insured vehicle with the permission of the insured is automatically an additional insured under the policy, irrespective of whether or not there was a restrictive endorsement in the policy excluding that person as an insured. In reaching this decision, the court reasoned that there was no allowable distinction between those policies carried voluntarily by most drivers and those policies required by the Financial Responsibility Act of certain drivers who under the act must show proof of their financial responsibility. A serious question is raised as to whether the court, in this reasoning to include the omnibus clause, has not made all automobile liability insurance policies conform to all the strict requirements of the special type of policy required of the financially irresponsible motorists.

At this point it would perhaps be helpful to review briefly the Arizona Financial Responsibility Act and then examine how other jurisdictions with similar laws have interpreted the Act in order fully to realize the potential effect of the Mayflower decision.

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