Is “Spouse” an Ambiguous Term in Virginia Insurance Policies?

By Cory Bilton

Wedding Figurines 1

In a historic move last week, the Supreme Court decided United States v. Windsor, striking down the Defense of Marriage Act (DOMA) as violating due process and equal protection rights guaranteed by the Constitution.  The consequence of the decision is that the federal government and federal law must treat all legally-valid marriages equally, regardless of whether it is a same-sex marriage or heterosexual marriage.  Locally, same-sex couples can legally marry in either DC or Maryland.  These couples will now enjoy both state and federal recognition of their marriage.

Virginia, however, is a different story.  In 2006, Virginia passed a state constitutional amendment defining marriage as “only a union between one man and one woman . . . .”  The Windsor decision does not require Virginia to grant or acknowledge same-sex marriages. But with Virginia’s close proximity to both DC and Maryland, same-sex couples who reside in Virginia can marry with relative ease by just crossing the state line.  Although Virginia will not recognize these marriages, now the federal government will.  As I brainstormed the Windsor decision’s effect on our firm’s practice areas, I realized that same-sex spouses living in Virginia, with a legal marriage from another state, should enjoy expanded insurance coverage because “spouse” is now an ambiguous term.

Many insurance policies extend certain coverages for a policyholder’s spouse.  For example, employer-sponsored group health plans often allow an employee to purchase health insurance for herself and for her spouse, despite the fact that the spouse is not an employee of the same employer.  Another example is the Virginia personal automobile insurance policy, which includes the policyholder’s spouse as a first-class insured under the policy as long as the spouse is a resident of the same household.  Many of these insurance policies do not specifically define the word spouse.  The Windsor decision gives Virginia policyholders new legal arguments that a same-sex spouse is a “spouse” for insurance purposes.

While Virginia does not recognize same-sex marriages, insurance companies are not prohibited from recognizing them.  After Virginia passed its constitutional amendment in 2006, Bob McDonnell, attorney general at the time, released an official advisory opinion about the amendment’s effect on the legal rights of same-sex couples.  In the letter, McDonnell states that the amendment does not change the rights of individuals to enter into or enforce lawful contracts.  With respect to employer-provided insurance benefits (for example, health insurance), McDonnell noted that the policies would not be invalidated for extending coverage to same-sex spouses.  He further noted that the legislature had also enacted Virginia Code § 38.2-3525, which states that group accident and sickness insurance may be extended to insure “any class of spouse.”  In his official opinion, these are private contractual matters between an insurer and the policyholder.  “The fact that unmarried individuals involved in a same-sex relationship may receive benefits pursuant to such a policy is not recognition by the Commonwealth . . . .”  Although an official advisory opinion from Virginia’s attorney general is not binding on the courts, it does indicate that elected officials do not view the ban on same-sex marriages to exclude same-sex partners being considered “spouses” for insurance purposes.

So what happens if an insurer denies coverage for a same-sex spouse, claiming that the person is not a “spouse” under the terms of the policy (a policy which normally provides certain coverage for a “spouse”)?  Courts will generally look to the intent of the policyholder and insurer.  This is where I think the Windsor decision provides policyholders with new support in favor of coverage.  At a personal level, a same-sex couple, married in DC and residing in Virginia, certainly believe themselves to be married.  Although their marriage is not legally-recognized by the Commonwealth, Windsor says that the federal government now recognizes their marriage.  So the couple themselves, the federal government, and other citizens or companies can recognize the marriage.  Therefore, an insurer arguing against coverage, by claiming that “spouse” in the insurance policy does not include a same-sex spouse has no one else to support its view (except Virginia, and Virginia says that it’s a private contract).  As the Virginia Supreme Court stated in Moore v. State Farm, 248 Va. 432, 434 (1994), “An insurance policy is a contract; therefore, we give the words used in this policy their ordinary and usual meaning when they are susceptible of such construction.”  So after Windsor, the argument that “spouse” includes a same-sex spouse is much closer to the “ordinary and usual meaning” than before.

But let’s say that “spouse” is susceptible to two different meanings, depending on who you are.  We then reach the conclusion that the insurance policy is ambiguous about the word “spouse” (unless the term is defined somewhere in the policy itself).  When an insurance policy is ambiguous because it is susceptible to two different meanings, and coverage hinges on the choice between the two, the court will adopt that construction which will afford coverage.  Lincoln Nat. Life Ins. Co. v. Commonwealth Corrugated Container Corp., 229 Va. 132, 137 (1985).  A court using this method of construction should always find that a same-sex spouse is a “spouse” under the insurance policy, even for Virginia residents married in another state, because doing so affords coverage under the policy.

Although this conclusion remains untested, I think the argument for it has been greatly strengthened by the Windsor decision.  No doubt in the weeks and months to come, insurance companies of all stripes will be taking a close look at their policies in order to determine if changes need to be made.  In the not-too-distant future, I’m sure that all forms of insurance will cover same-sex spouses in exactly the same way they cover opposite-sex spouses.  “Spouse” will just mean spouse.

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