PORTLAND (AP) – Auto insurers cannot limit coverage by adding restrictive language to uninsured motorist policies, a divided state supreme court ruled Thursday.

The 5-2 decision expands the court’s previous finding that an insurer’s liability extends to damages caused by an uninsured motorist to family members for whom a policyholder is legally entitled to bring a claim.

The ruling came in a lawsuit by Gregory Butterfield seeking damages arising from the death of his daughter Brandy, 21, in a car crash in which the vehicle she was riding in and the driver of the other vehicle were uninsured.

Norfolk & Dedham Mutual Fire Insurance Co. denied Butterfield’s claim, saying Brandy was not covered because she did not reside with her father and thus was not “a named insured” under the policy.

Butterfield’s policy defined family members eligible for uninsured motorist recovery as relatives living with the insured. Butterfield’s daughter was living with her mother at the time of her death and was insured under her mother’s auto liability policy, which paid the $50,000 uninsured motorist limit.

A Cumberland County Superior Court judge ruled in favor of Butterfield and the Supreme Judicial Court denied Norfolk’s appeal, saying its policy failed to meet the minimum coverage standards set by the Legislature.

The dissenting justices said the policy provision limiting Norfolk’s risk was both legal and reasonable. They said that without such a provision, the insurer could not accurately assess its exposure to risk and set an appropriate premium.

AP-ES-09-30-04 1346EDT

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