Auto insurance can be beneficial when you are in a car accident. However, it isn’t uncommon to have specific provisions in your insurance policy that can limit your coverage. A recent case out of Kenner, Louisiana, interpreted whether certain caveats in an insurance policy can limit a client’s uninsured motorist coverage (UM/UIM).
Denise Breaux was driving on Interstate 10 behind a truck driven by Jonathan Blum. When a ladder fell off the back of Blum’s truck, Breaux tried to dodge the ladder that fell right into her path. Unfortunately, Breaux’s vehicle collided with Danny Castille’s tractor/trailer while attempting to avoid the ladder. Castille and his wife filed a lawsuit against Breaux, her insurer, and Blum, and then later added Lloyds at Lloyd’s, London (Lloyds) as a defendant. The Castilles were seeking UM/UIM coverage from Lloyds under a surplus lines insurance policy that was issued to Mr. Castille.
Lloyds asserted that the Castilles were not entitled to UM/UIM coverage because they specifically issued an insurance policy that applied when the tractor did not have the trailer attached, known as Bobtail Liability insurance. Further, they argued that liability insurance was only available when the tractor was bobtailing; therefore, UM/UIM coverage only applied in the same scenario. Since, at the time of the accident, the Castilles’ tractor had a trailer attached and was not bobtailing, Lloyds sought summary judgment.
Summary judgment is when a party asks the court to decide the case in their favor because there are no facts in dispute. The trial court ruled for Lloyds, and the Castilles filed an appeal on the grounds that the UM coverage constituted a separate insurance policy. In deciding whether the UM coverage was a separate policy from the bobtailing coverage, the appellate court looked at the attached UM/UIM endorsement and the liability coverage.
The appeals court examined the rules regarding how insurance contracts are interpreted in Louisiana. The court held that insurance contracts must be enforced as written. Courts lack the authority to alter the terms of insurance contracts under the guise of contractual interpretation when the policy’s provisions are couched in unambiguous terms. The determination of whether a contract is clear or ambiguous is a question of law. Cadwallader v. Allstate Ins. With those principles in mind, the appeals court sought to tackle the case at hand.
First, the court held the liability and UM coverage were listed in separate sections of Castilles’ insurance policy. Next, the court explained that liability coverage protects the policyholder from certain amounts of legal liability. In contrast, UM/UIM coverage protects the policyholder against uninsured people who would be legally obligated to pay a certain amount of money to the policyholder. The court concluded because of the purposes of the different coverages and the fact that the coverages were located in separate parts of the policy, this supported the finding that the “bobtailing” limitation on the liability coverage did not impact the UM/UIM coverage.
Further, the court explained that the UM/UIM endorsement changed the policy for covered automobiles to include all “sums the ‘insured’ are legally entitled to recover as compensatory damages from the owner or driver of an ‘uninsured motor vehicle.'” Finally, the court found in the policy the term “covered automobiles” was not defined only to include bobtailing automobiles. Since the court was able to differentiate between the liability coverage and the language of the UM/UIM coverage, the court sided with Castilles’ appeal. Therefore, the Castilles were entitled to Lloyds’s UM/UIM coverage.
This case demonstrates the complexity of pursuing a lawsuit against a large insurance company such as Lloyds. With the help of their diligent attorney, the Castilles were able to find the insurance coverage that should help with their claims. To ensure success, make sure you have an experienced uninsured motorist coverage attorney before filing your lawsuit.
Additional Sources: DANNY CASTILLE, ET UX. VERSUS JONATHAN BLUM, ET AL.
Written by Berniard Law Firm
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