Court Discusses Limits on Use of Uninsured Motorist Coverage

The arena of insurance law is a very confusing area in which, quite often, significant knowledge and experience is required for a quality outcome. It is important to know which types of coverage are available and applicable for different circumstances. Without knowing which coverage can apply and to what extent it can apply, an insured individual may find themselves without the coverage they thought they would have in the event of an accident. In some circumstances, insured individuals attempt to insure themselves in the event that the person who they get into an accident with is uninsured or underinsured. This has the result of allowing the insured to have access to a pool of money under all circumstances. Sometimes two different people may have uninsured coverage on the same vehicle or under the same policy. The impact of this kind of insurance largely depends on the relationship status of the parties. This type of a scenario was the focal discussion point in Hardy v. Augustine.

In this case, the Court discussed a way in which the plaintiffs attempted to add more claims to the general damages claim. Mr. Augustine was driving down the road and swerved into oncoming traffic. Mr. and Mrs. Hardy’s son was driving a motorcycle and was involved in a tragic head-on collision with Mr. Augustine after he swerved into oncoming traffic, which ultimately took his life. The tragic event led to Mr. and Mrs. Hardy bringing action against Mr. Augustine and his insurance company. The Hardys brought two distinct claims: they sued for past and future loss of love, affection, and companionship and they also sued for past and future grief and anguish. At the trial level, the jury awarded damages for each distinct claim. The jury awarded damages for both claims plus medical expenses and funeral costs.

Assuming that the amount of damages were going to exceed Mr. Augustine’s insurance coverage, the Hardys brought suit against State Farm, its own insurance company, under two different uninsured insurance policies. One policy was owned by Mr. Hardy and the other was owned by Mrs. Hardy. Each policy would pay up to $100,000 for each incident. State Farm paid $100,000 under the first policy, but refused to pay under the second policy citing the anti-stacking statute as a legal basis for denial of making a payout under both policies.

The anti-stacking statute states in pertinent part:

“…such limits of liability shall not be increased because of multiple motor vehicles covered under said policy of insurance, and such limits of uninsured motorist coverage shall not be increased when the insured has insurance available to him under more than one uninsured motorist coverage provision or policy.”

The statute clearly negates the Hardys’ attempt to stack both uninsured policies against State Farm. However, their argument was that in a case where the insurance policy holders were formerly husband and wife, and both parties held separate policies in a situation similar to theirs, the anti-stacking statute would not negate multiple uninsured policies. Essentially, the pair were arguing that there should not be discrimination based on the marital status of the policy holders. However, the distinction does not create a windfall; rather it is based on the idea that a married couple acts as a unit while a divorced pair act, legally speaking, as two distinct units. This is why the anti-stacking provision would not apply in that circumstance. Because Mr. and Mrs. Hardy are married, they are unable to take advantage of multiple uninsured policies in an effort to exact a larger amount of payments from State Farm. Therefore, only one of the policies can be used and State Farm is not liable for the other $100,000 policy coverage.

When dealing with your own or the other party’s insurance company it is strongly recommended that you seek legal counsel.

At the Berniard Law Firm, attorneys can help prepare you to deal with insurance companies.