The Colorado Courtroom of Appeals has dominated that it’s unlawful for auto insurance coverage carriers to limit uninsured motorist/underinsured motorist (UM/UIM) advantages primarily based on automobile use.
Plaintiff Beverly Hughes filed swimsuit in opposition to her insurance coverage service Essentia Insurance coverage Co. after she was injured in a wreck whereas driving her “common use automobile.” Essentia denied her declare for UM/UIM advantages below her traditional automobile insurance coverage. As a substitute, the service stated she was required to insure her common use automobile individually to maintain her traditional automobile insurance coverage coverage, in keeping with the courtroom’s Could 5 opinion.
Essentia additionally argued that Hughes’ settlement along with her separate auto insurance coverage service, Vacationers Insurance coverage, meant she was “primarily protected by Essentia” and the coverage follows state legislation.
The driving force who allegedly triggered the accident, per offered background within the courtroom’s opinion, was insured by an auto coverage with bodily damage limits of $25,000, and Hughes claimed her accidents and losses “considerably exceeded” that quantity.
“The traditional automobile insurance coverage coverage explicitly excepted ‘common use autos’ from UM/UIM protection, and subsequently Essentia refused to offer Hughes with UM/UIM advantages for her accidents as a result of she wasn’t utilizing one of many traditional vehicles on the time of the accident,” Appeals Courtroom Choose Craig Welling wrote within the opinion. “Hughes filed swimsuit, alleging that she was entitled to the UM/UIM advantages below the Essentia traditional automobile insurance coverage coverage no matter what automobile she was driving on the time of the accident.”
Judges Stephanie Dunn and David H. Yun concurred with Welling’s opinion.
The trial courtroom dominated in favor of Essentia primarily based on part 10-4-609 (the state’s legislation on insurance coverage safety in opposition to uninsured motorists), Colorado’s revised statutes, and the supreme courtroom’s interpretation of part 10-4-609 in Cruz v. Farmers Insurance coverage Trade. Essentia cites Cruz “in help of the proposition that sure exclusions in UM/UIM insurance coverage contracts are permissible in Colorado, together with exclusions for a recurrently used automobile that isn’t insured (and for which no premium is paid) below the coverage,” the opinion states.
Nevertheless, Welling discovered that, in keeping with part 10-4-609(1)(c), “UM/UIM protection is ‘along with any authorized legal responsibility protection and shall cowl the distinction, if any, between the quantity of the boundaries of any authorized legal responsibility protection and the quantity of the damages sustained . . . as much as the utmost quantity of the [UM/UIM] protection obtained pursuant to this part.’ …Put in another way, UM/UIM protection fills the hole between a tortfeasor’s insurance coverage legal responsibility restrict and the quantity of damages sustained by the insured, as much as the quantity of the UM/UIM protection bought.”
They reversed the decrease courtroom’s judgment and remanded the case.
“We conclude that the trial courtroom erred by failing to use our supreme courtroom’s holding in DeHerrera v. Sentry Insurance coverage Co. …which offers that UM/UIM advantages cowl individuals injured by uninsured or underinsured motorists and might’t be tied to the occupancy or use of a selected automobile or sort of car.”
The Colorado Supreme Courtroom dominated in DeHerrera v. Sentry Insurance coverage Co. that mandated protection below part 10-4-609 is for individuals, not autos.
“In reaching this conclusion, the supreme courtroom famous that ‘[t]he UM/UIM statute incorporates no provisions excluding safety for an insured primarily based on the form of automobile an insured occupies on the time of damage,’” the judges wrote.
“…The common use automobile exclusion is squarely opposite to DeHerrera’s central holding: that part 10-4-609 offers protection for individuals and doesn’t tie safety in opposition to uninsured motorists to the insured’s occupancy of any specific sort of car. …Equally, circumstances determined post-DeHerrera reveal that the common use automobile exclusion discovered within the definition of ‘insured’ within the UM/UIM provision of the Essentia coverage violates part 10-4-609.”
Concerning Essentia’s argument that they “primarily protected” Hughes by means of their requirement of a secondary coverage, the judges rejected the argument.
“Despite the fact that Essentia required a second coverage, Essentia can’t escape its personal statutorily mandated responsibility to offer UM/UIM advantages (if the policyholder elects to buy them) to individuals, quite than vehicles, by making an attempt to tie its offered UM/UIM protection to the occupancy of “your lined auto” (on this case, one of many traditional vehicles). Essentia’s urged interpretation is opposite to the central holding of DeHerrera — particularly, that UM/UIM advantages cowl folks and might’t be tied to the occupancy of a sure automobile.”
The judges agreed that the 2 circumstances cited by the service – Jacox and Rivera – differ from Hughes’ case and that the courtroom is “sure by” the DeHerrera ruling.
“The plaintiffs in each Jacox and Rivera had been in search of to get well UM/UIM advantages below the identical coverage that insured the automobile through which they had been injured and from which that they had already collected below the legal responsibility provisions. Right here, Hughes isn’t in search of to invoke the legal responsibility provisions of the Essentia coverage, simply its UM/UIM profit. And he or she is doing so as a result of the at-fault driver’s protection is insufficient, not due to any alleged shortcoming of the Essentia coverage itself,” the courtroom’s opinion states.
The courtroom additionally dominated that Essentia’s coverage doesn’t meet protection necessities below part 10-4-609 and, subsequently, “public coverage doesn’t dictate that the exclusion should be enforced.”
“Whether or not DeHerrera displays clever, honest, or prudent public coverage is a query for the legislature (or the supreme courtroom within the occasion it needs to revisit DeHerrera); within the meantime, we’re sure by DeHerrera,” the opinion states.
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