Underinsured motorist (UIM) benefits are those that may be paid by one’s own auto insurer when an at-fault party lacks sufficient insurance to fully cover the damages of a person injured in an accident.
But matters can become complicated when there are a number of intersecting insurance policies and disputes regarding who was at-fault.
The recent case of State Farm v. Smith involves a driver who to sought benefits from two different policies following a 2006 crash.
According to court records, plaintiff was injured in a car accident. At the time, he was driving a vehicle owned by the parents of his front seat passenger. The vehicle had been given to their daughter for her personal use. Plaintiff was driving the vehicle with the daughter’s permission, and she was the sole passenger in the vehicle.
The accident occurred when plaintiff attempted to make a right turn from the left lane. In so doing, he collided with a car that was waiting at a red light at an intersecting street.
Both the owners of the vehicle and their daughter were insured by a policy issued by State Farm (Policy 1) that included liability coverage and UM/ UIM benefits.
Plaintiff, meanwhile, was also covered by a State Farm policy (Policy 2), that had been issued to his mother and that also contained UM/ UIM benefits, as well as liability coverage.
Policy 2 extended coverage to plaintiff for his use of his mother’s car, as well as any vehicle he did not own, including this one.
A year after the crash, plaintiff filed a lawsuit against the vehicle owners and passenger, on the grounds they had negligently failed to maintain the brakes. State Farm filed a motion for declaratory judgment arguing the policy excluded coverage for this claim. Trial court granted summary judgment.
While that claim was still pending, passenger filed a lawsuit against the driver for negligent operation of the vehicle under Policy 2. Ultimately, State Farm paid out that claim for the policy limit of $150,000.
After this, plaintiff amended his complaint to include an action against State Farm for UIM benefits under his mother’s policy (Policy 2). State Farm counterclaimed that it was not liable because the vehicle he was driving was not an uninsured/ underinsured motor vehicle. The insurer argued coverage was not extended to plaintiff because Policy 2 defined “uninsured motor vehicle” to exclude any motor vehicle that was “insured under the liability coverage of this policy” – which would include the car plaintiff was driving at the time of the crash.
The case went to trial and jurors decided the case in favor of plaintiff, awarding $215,000 in damages, which was ultimately reduced to $150,000 – the policy limit.
Florida’s Second District Court of Appeals reversed and remanded for an entry of judgment in accordance with its ruling.
The main question boiled down to whether the provision that governed vehicles insured under Policy 2’s liability coverage unambiguously precludes UM/UIM coverage for plaintiff’s injuries. The court answered this question in the affirmative.
If you have been injured in an accident, contact the Hollander Law Firm at 888-751-7777 for a free and confidential consultation. There is no fee unless we win.
State Farm v. Smith , June 3, 2016, Florida’s 2nd DCA
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