Because I handle so many car accident cases, I know that crashes involving drivers with insufficient insurance to cover the victims’ injuries can be devastating. In a sense, the victims are hurt twice—once by the accident and a second time by being stuck with bills that would normally be covered by adequate insurance. That’s why, as a Missouri motor vehicle accident lawyer, I was disappointed to see the ruling in Owners Insurance Co. v. Hughes, in which Betty Lu Hughes appealed a declaratory judgment that her insurance company was not obligated to cover her damages in a crash with an underinsured driver. Hughes was a passenger in a car driven by Lilburn Mash when they crashed. Her injuries exceeded $200,000, but Mash’s insurance only covered up to $100,000 for bodily injury. Owners won a declaratory judgment that Mash was not “underinsured” as defined by the policy, and the Eighth Circuit affirmed that ruling.
After collecting the full amount from Mash’s policy, Hughes sought to collect from her own underinsured motorist coverage. This triggered the suit by Owners for a declaratory judgment. In addition to asking for a ruling on the definition of underinsured, it also argued that its policy set-off provision would reduce the settlement to zero because Hughes had already received $100,000 from Mash’s policy. The parties stipulated certain facts, then submitted cross-motions for summary judgment. The district court in St. Louis ultimately granted summary judgment to Owners on both grounds.
Hughes appealed to the Eighth Circuit. According to the policy, Owners will cover compensatory damages Hughes is legally entitled to recover from the at-fault driver if the vehicle is underinsured. An underinsured vehicle is one whose bodily injury policy limits are at least as large as those required by Missouri law—$25,000—but less than the $100,000 stated by the Owners policy’s own declarations. Hughes argued that this language should not be enforced because if it is, the $100,000 policy limit on her underinsured motorist policy would never be available. The Eighth Circuit rejected that argument, noting that the Missouri Supreme Court rejected a very similar one in a 1991 case. It also distinguished Hughes’s case from various other underinsurance cases, noting that this one involves no “stacking” of policies and no ambiguity. For those reasons, the court held that Mash clearly did not meet the policy’s definition of underinsured, and declined to reach the issue of the set-off provision.
As a St. Louis car crash attorney, I am disappointed by any decision that leaves an injured person without the means to get adequate treatment or compensation. If an underinsured motorist policy does not apply when the at-fault driver has less insurance than the amount of damages, is underinsured motorist coverage worth having in the first place? If insurance companies are permitted to define “underinsured” according to an arbitrary cutoff rather than the needs of the insured, they can save money—but the motorist who bought and paid for the policy, with the expectation of funding when she needed it, is not served. As a southern Illinois auto accident lawyer, I question whether this serves the state’s public policy interests.
If you were injured by someone else’s bad decisions, don’t hesitate to call Carey, Danis & Lowe for a free consultation on your rights and your legal options. You can reach us through our website or call toll-free at 1-877-678-3400.
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