Opinion
RICHARDSON, J.
The case involves the interpretation of provisions of an aircraft liability insurance policy.
[383]*383Francis and Bernice Thelen were the owners of a small airplane maintained at the Compton Airport. At the insistence of airport officials the Thelens obtained liability insurance coverage for the plane from respondent National Insurance Underwriters (National).
On July 12, 1969, while the policy was in effect, the plane crashed. At the time of the accident the plane’s occupants included three nonpaying guests, Ann, Robert and Edward Schroeder, and the pilot, Everett Pavitt, who was using the aircraft with permission of the Thelens. Ann apd Robert were killed in the crash, and Edward was injured. A residence owned by Maurice and Delia Carter was damaged. The parents of the Schroeder victims instituted a wrongful death action against the Thelens and Pavitt (referred to herein as defendants). The Carters filed suit against defendants seeking recovery for the damage done to their property.
National denied any liability under the policy and filed the present declaratory relief action to determine the extent of its liability, if any. National’s motion for summary judgment was granted by the trial court which determined that National was neither obligated to defend the pending actions nor to pay any judgments entered against defendants. Defendants have appealed.
We consider two principal areas of inquiry. Does the policy, fairly read, exclude coverage for accidents occurring while the aircraft is being piloted by persons other than the Thelens? Even if the airplane had been piloted by the Thelens, does the policy extend coverage to passengers? The respective contentions of the parties may be summarized. Defendants argue (1) that the insuring clause specifically provides coverage for permissive users such as Pavitt, and any conflict between this insuring clause and the pilot’s exclusion clause must be resolved against National as author of the policy; (2) National was prohibited by law from excluding coverage for permissive users; and (3) to the extent that the Uniform Aircraft Financial Responsibility Act (Pub. Util. Code, § 24230 et seq.) permits exclusion of coverage for nonpaying guest passengers it is unconstitutional. National, in turn, asserts that (1) since the plane was piloted by Pavitt the policy is wholly inapplicable, and (2) in any event, the policy excludes coverage for the Schroeder passengers.
[384]*384I. The Policy Exclusion.
Defendants rely upon language in the insuring clause of the policy which defines the word “insured” to include “. . . not only the Named Insured but also any person while using or riding in the aircraft ... provided the actual use is with the permission of the Named Insured.” Defendants contend that by incorporation of the foregoing definition the policy thereby extends liability coverage for accidents occurring when the aircraft is piloted by permissive users such as Pavitt.
It is true that the insuring clause refers in broad terms to permissive users. However, in accordance with well established rules of construction we will conclude that it is also true that this general definitional provision must yield to the specific and unambiguous limitation found in the latter part of the policy which explicitly confines coverage to accidents occurring while the plane is piloted by Francis or Bernice Thelen. (See Continental Cas. Co. v. Phoenix Constr. Co. (1956) 46 Cal.2d 423 [296 P.2d 801, 57 A.L.R.2d 914]; Burr v. Western States Life Ins. Co. (1931) 211 Cal. 568 [296 P. 273].)
The policy is not complicated. The definition of the term “insured” upon which defendants rely appears on the first page of the policy in a general section entitled “Part 1—Aircraft Liability,” within a special subsection denominated “Persons and Organizations Insured.” The paragraph defining the “Insured,” of course, is not the entire policy. It must be read in conjunction with other portions thereof. The pilot exclusion clause appears twice in the policy, in printing of size and intensity identical to that of the rest of the policy save only for paragraph headings. First, at page two of the policy, and under the boldface heading designated “Exclusions,” it is provided that “This policy does not apply under Part I [i.e., the insuring clauses]:” followed by a list of exclusions. The last exclusion, designated “H”, declares the inapplicability of the policy “while the aircraft.is in flight whenever the pilot operating the aircraft is not qualified in accordance with the requirements specified in Item 7 ‘Pilots’ of the Declarations.” By reason of the foregoing language, the insured was specifically advised in plain and conspicuous language that no coverage is afforded if the aircraft is piloted by an unqualified pilot, as defined by the declarations.
Even in the event of a failure to observe the foregoing exclusion, the “Declarations” section of the policy (a special, partially typewritten sheet inserted into the standard form policy following page 2) sets forth again [385]*385in clear and unambiguous language the pilot exclusion clause, thereby giving the insured a second signal. The “Declarations” are of immediate and particular interest to the insured, for they contain the typewritten information specifying the named insureds, the policy period, premium and coverages, a description of the aircraft, and a list of the authorized pilots and their qualifications. The latter provision states: “Pilots: This policy applies when the aircraft is in flight: (a) only while being operated by the pilot(s) named or designated below, . . .” Immediately beneath this provision are the names “F. H. Thelen” and “Bernice F. Thelen,” and the additional language (not pertinent herein) “and any pilot employed by a Fixed Base Operator,” together with the requirement that the designated pilot hold a specific type of FAA certificate and a minimum number of pilot flying hours.
Although we have invalidated an exclusionary clause where it is hidden in a subsequent section of the policy bearing no clear relationship to the insuring clause, or concealed in a mass of fine print (see Gray v. Zurich Insurance Co. (1966) 65 Cal.2d 263, 273 [54 Cal.Rptr. 104, 419 P.2d 168]), the pilot exclusion clause in the present policy suffers from neither defect and as a matter of law is conspicuous, both in the exclusion clause and in the “Declarations.”
Defendants insist, however, that the policy is ambiguous in that the insuring clause purports to cover all permissive users while the pilot exclusion clause limits, or at the least reduces, such coverage. However, defendants fail to recognize that the two provisions, the insuring and exclusionary language, fulfill two different functions. The insuring provision, on the one hand, has as its purpose the definition of those persons who, in addition to the named insureds, may claim coverage and protection with respect to accidents to which the policy applies. The pilot exclusion clause, on the other hand, specifies that the policy does not apply unless the plane is piloted by a person named in that clause.
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Opinion
RICHARDSON, J.
The case involves the interpretation of provisions of an aircraft liability insurance policy.
[383]*383Francis and Bernice Thelen were the owners of a small airplane maintained at the Compton Airport. At the insistence of airport officials the Thelens obtained liability insurance coverage for the plane from respondent National Insurance Underwriters (National).
On July 12, 1969, while the policy was in effect, the plane crashed. At the time of the accident the plane’s occupants included three nonpaying guests, Ann, Robert and Edward Schroeder, and the pilot, Everett Pavitt, who was using the aircraft with permission of the Thelens. Ann apd Robert were killed in the crash, and Edward was injured. A residence owned by Maurice and Delia Carter was damaged. The parents of the Schroeder victims instituted a wrongful death action against the Thelens and Pavitt (referred to herein as defendants). The Carters filed suit against defendants seeking recovery for the damage done to their property.
National denied any liability under the policy and filed the present declaratory relief action to determine the extent of its liability, if any. National’s motion for summary judgment was granted by the trial court which determined that National was neither obligated to defend the pending actions nor to pay any judgments entered against defendants. Defendants have appealed.
We consider two principal areas of inquiry. Does the policy, fairly read, exclude coverage for accidents occurring while the aircraft is being piloted by persons other than the Thelens? Even if the airplane had been piloted by the Thelens, does the policy extend coverage to passengers? The respective contentions of the parties may be summarized. Defendants argue (1) that the insuring clause specifically provides coverage for permissive users such as Pavitt, and any conflict between this insuring clause and the pilot’s exclusion clause must be resolved against National as author of the policy; (2) National was prohibited by law from excluding coverage for permissive users; and (3) to the extent that the Uniform Aircraft Financial Responsibility Act (Pub. Util. Code, § 24230 et seq.) permits exclusion of coverage for nonpaying guest passengers it is unconstitutional. National, in turn, asserts that (1) since the plane was piloted by Pavitt the policy is wholly inapplicable, and (2) in any event, the policy excludes coverage for the Schroeder passengers.
[384]*384I. The Policy Exclusion.
Defendants rely upon language in the insuring clause of the policy which defines the word “insured” to include “. . . not only the Named Insured but also any person while using or riding in the aircraft ... provided the actual use is with the permission of the Named Insured.” Defendants contend that by incorporation of the foregoing definition the policy thereby extends liability coverage for accidents occurring when the aircraft is piloted by permissive users such as Pavitt.
It is true that the insuring clause refers in broad terms to permissive users. However, in accordance with well established rules of construction we will conclude that it is also true that this general definitional provision must yield to the specific and unambiguous limitation found in the latter part of the policy which explicitly confines coverage to accidents occurring while the plane is piloted by Francis or Bernice Thelen. (See Continental Cas. Co. v. Phoenix Constr. Co. (1956) 46 Cal.2d 423 [296 P.2d 801, 57 A.L.R.2d 914]; Burr v. Western States Life Ins. Co. (1931) 211 Cal. 568 [296 P. 273].)
The policy is not complicated. The definition of the term “insured” upon which defendants rely appears on the first page of the policy in a general section entitled “Part 1—Aircraft Liability,” within a special subsection denominated “Persons and Organizations Insured.” The paragraph defining the “Insured,” of course, is not the entire policy. It must be read in conjunction with other portions thereof. The pilot exclusion clause appears twice in the policy, in printing of size and intensity identical to that of the rest of the policy save only for paragraph headings. First, at page two of the policy, and under the boldface heading designated “Exclusions,” it is provided that “This policy does not apply under Part I [i.e., the insuring clauses]:” followed by a list of exclusions. The last exclusion, designated “H”, declares the inapplicability of the policy “while the aircraft.is in flight whenever the pilot operating the aircraft is not qualified in accordance with the requirements specified in Item 7 ‘Pilots’ of the Declarations.” By reason of the foregoing language, the insured was specifically advised in plain and conspicuous language that no coverage is afforded if the aircraft is piloted by an unqualified pilot, as defined by the declarations.
Even in the event of a failure to observe the foregoing exclusion, the “Declarations” section of the policy (a special, partially typewritten sheet inserted into the standard form policy following page 2) sets forth again [385]*385in clear and unambiguous language the pilot exclusion clause, thereby giving the insured a second signal. The “Declarations” are of immediate and particular interest to the insured, for they contain the typewritten information specifying the named insureds, the policy period, premium and coverages, a description of the aircraft, and a list of the authorized pilots and their qualifications. The latter provision states: “Pilots: This policy applies when the aircraft is in flight: (a) only while being operated by the pilot(s) named or designated below, . . .” Immediately beneath this provision are the names “F. H. Thelen” and “Bernice F. Thelen,” and the additional language (not pertinent herein) “and any pilot employed by a Fixed Base Operator,” together with the requirement that the designated pilot hold a specific type of FAA certificate and a minimum number of pilot flying hours.
Although we have invalidated an exclusionary clause where it is hidden in a subsequent section of the policy bearing no clear relationship to the insuring clause, or concealed in a mass of fine print (see Gray v. Zurich Insurance Co. (1966) 65 Cal.2d 263, 273 [54 Cal.Rptr. 104, 419 P.2d 168]), the pilot exclusion clause in the present policy suffers from neither defect and as a matter of law is conspicuous, both in the exclusion clause and in the “Declarations.”
Defendants insist, however, that the policy is ambiguous in that the insuring clause purports to cover all permissive users while the pilot exclusion clause limits, or at the least reduces, such coverage. However, defendants fail to recognize that the two provisions, the insuring and exclusionary language, fulfill two different functions. The insuring provision, on the one hand, has as its purpose the definition of those persons who, in addition to the named insureds, may claim coverage and protection with respect to accidents to which the policy applies. The pilot exclusion clause, on the other hand, specifies that the policy does not apply unless the plane is piloted by a person named in that clause. The former clause does not purport to touch upon the subject of pilots’ qualifications, and the latter clause does not attempt to describe those persons who are deemed to be the “insured.” Contrary to the defendants’ assumption, the two provisions act independently of each other. They are in harmony while performing different offices.
Even were we to assume, however, for purposes of argument, that the pilot exclusion language restricts coverage which the insuring provision purports to grant, it is difficult to accept the argument that any fatal [386]*386ambiguity is thereby established. The insuring clause, in general terms, extends coverage to various “insured” persons, including persons “using or riding in” the aircraft with the Thelens’ permission. Yet that clause is, in the specific words of the policy, “subject to the . . . exclusions, conditions and other terms of this policy.” (Italics added.) As we have seen, the pilot exclusion clause creates a specific exception to the coverage extended in the insuring clause: The policy is wholly inapplicable unless the aircraft is piloted by a person whose name and qualifications are specified in the policy. Under well established principles of contract interpretation, “. . . when a general and particular provision are inconsistent, the latter is paramount to the former.” (Code Civ. Proc., § 1859; Civ. Code, § 3534; see Metzler v. Thye (1912) 163 Cal. 95, 99 [124 P. 721]; Comunale v. Traders & General Ins. Co. (1953) 116 Cal.App.2d 198, 201 [253 P.2d 495].) The specific language of the pilot exclusion clause overrides the general coverage provisions of the insuring clause.
The foregoing conclusions are consistent with another controlling principle of contract interpretation. We have stated that “An insurance company has the right to limit the coverage of a policy issued by it and when it has done so, the plain language of the limitation must be respected.” (Continental Cas. Co. v. Phoenix Constr. Co., supra, 46 Cal.2d 423, 432.) We have also said that courts must attempt to ascertain the insured’s “reasonable expectations” as to coverage. (E.g., Gray v. Zurich Insurance Co., supra, 65 Cal.2d 263.) It appears self-evident that the Thelens could not reasonably have expected National to afford coverage without regard to the identity and qualifications of those persons entrusted with flying the aircraft. In view of the relatively few persons qualified to fly a plane, and the obvious hazard to the occupants and to the aircraft from flights by unqualified pilots, it is understandable that an insurer would insist on knowing who the proposed pilots were, evaluating their qualifications, and making its policy inapplicable to accidents involving pilots not disclosed to, nor approved by, the insurer. In pur view, the pilot exclusion clause is unambiguous and accords with the “reasonable expectations” of the insured.
II. The Uniform A ircraft Responsibility A ct.
Relying upon Wildman v. Government Employees’ Ins. Co. (1957) 48 Cal.2d 31 [307 P.2d 359], defendants next urge that if the subject policy is construed as excluding coverage for pilots not specified in the [387]*387policy, such an exclusion violated public policy. In Wildman we held that an insurer’s attempt to exclude permissive users from automobile liability insurance protection was contrary to public policy and therefore invalid. We determined that the financial responsibility provisions of the Vehicle Code must be construed as part of every policy of automobile insurance since “the public policy of this state is to make owners of motor vehicles financially responsible to those injured by them ....” (P. 39.)
The public policy identified and relied on by us in Wildman was gleaned from former sections 415 and 402 of the Vehicle Code (see present Veh. Code, §§ 16450, 17150, respectively) and we stressed the significance of those provisions of section 415 which specifically required that any policy of automobile liability insurance contain coverage for permissive use of the automobile by others. Section 402, in turn, expressly fastened liability on the owner for the negligent operation by a permissive user. (At present, coverage for acts of permissive users is required of an automobile liability insurance policy by virtue of Ins. Code, § 11580.1, enacted in 1970, and Veh. Code, § 16451.)
Unlike the statutory scheme considered by us in Wildman, the Uniform Aircraft Financial Responsibility Act (hereafter act) (Pub. Util. Code, § 24230 et seq.) contains no expression of a. public policy mandating insurance coverage for accidents occurring while the aircraft is piloted by unspecified persons operating the plane with the owner’s permission. The act provides merely that an owner is liable for its negligent operation by one flying the plane with the owner’s permission (Pub. Util. Code, § 21404), and limits the extent of the owner’s exposure in cases not involving principles of vicarious liability (id, § 21404.1). Following any mishap involving an aircraft the act requires the Department of Aeronautics to fix the amount of security needed to satisfy any judgment that may be rendered. (Id., §§ 24300-24302, 24325.) An owner may avoid meeting the requirement for security payment by obtaining a liability insurance policy covering the aircraft. (Id., § 24327, subds. (d), (e).)
A review of the act makes it apparent that, while the statutory scheme therein revealed encourages owners of aircraft to obtain liability insurance coverage, thereby eliminating the necessity for deposit of a security, no public policy is disclosed requiring aircraft owners to provide coverage for all “permissive users” who may operate the aircraft. Wildman and the cases following it speak in the context of a statutory [388]*388scheme which expressly requires certain coverage to be included in every automobile insurance policy. In contrast, in the absence of any general declaration of public policy mandating coverage of “permissive users” for aircraft, we discern no reason to interfere with the parties’ full freedom to contract for coverage on any terms not specifically prohibited by statute. (See Bequette v. National Insurance Underwriters, Inc. (9th Cir. 1970) 429 F.2d 896; Electron Machine Corp. v. American Mercury Insurance Co. (5th Cir. 1961) 297 F.2d 212.)
III. The Guests.
Defendants contend, finally, that the policy covers the Schroeders, flying in the airplane as guests of the pilot, Pavitt. While conceding that the policy itself clearly and explicitly excludes “passengers,” defined by the policy as any persons riding in the aircraft, defendants assert, however, that public policy requires that the provisions of the Aircraft Financial Responsibility Act (Pub. Util. Code, §§ 24230-24410) must be incorporated into all aircraft liability policies in this state. (Cf. Wildman v. Government Employees’ Ins. Co., supra, 48 Cal.2d 31.)
The difficulty with the foregoing contention is that the act expressly permits exclusion of nonpaying passengers in aircraft liability policies. (Pub. Util. Code, § 24351, subd. (c).) Defendants maintain, however, that this provision, and the exclusion therein contained, are impermissibly discriminatory since other provisions of the act require coverage for paying passengers. To the contrary, we find nothing in the act mandating such coverage. Section 24350, subdivision (b), which defines the minimum requisites of a liability policy, expressly declares that such a policy must provide coverage for “bodily injury to or death of a person not a passenger” in specified amounts. (Italics added.) It is clear that by reason of this provision, both paying and nonpaying passengers may be excluded.
Defendants suggest that any legislative scheme which would permit the exclusion of passengers is arbitrary and capricious and violates equal protection principles. We disagree. The Legislature has evinced its continuing concern for the toll of aircraft accidents upon third party victims who, like the Carters, may suffer personal injury or property loss and who have neither foreknowledge of flights of small aircraft, nor opportunity to assess the risks and to insure against them. Coverage for these innocent victims is statutorily imposed by Public Utilities Code [389]*389section 24350, subdivision (b). On the other hand, guests and passengers presumably are aware of the enterprise upon which they embark and are thereby fully capable of protecting themselves. Though they may now sue and recover against the owners for injuries suffered as a result of the negligent operation or maintenance of the aircraft, the Legislature has not elected to require that they be covered under a liability insurance policy. In the light of all circumstances, we cannot say that the distinction is without a rational basis. It follows, accordingly, that the act is not violative of equal protection of the laws.
The judgment is affirmed.
Wright, C. J., McComb, J., Sullivan, J., and Clark, J., concurred.