Securing coverage for accidents involving underinsured motorists is part of my job as a Missouri motor vehicle accident attorney. As a rule, I represent people with expensive injuries—because those are the people who most badly need compensation after a crash. Unfortunately, expensive injuries have a good chance of being turned down, because auto insurance companies lose money when they pay claims. And uninsured/underinsured motorist coverage claims are especially likely to be turned down by insurance companies, making them the subject of many lawsuits. In Bethke v. Auto-Owners Insurance Co., the dispute was over whether an insurance contract should exclude coverage for an accident involving a car rental company that’s self-insured under Wisconsin law. The Wisconsin high court majority said it should not.
Kathryn and Andrew Bethke, a mother and son, were involved in a serious accident with an uninsured motorist driving a car rented from Avis. Kathryn died as a result of the crash, as did the driver of the other car, British resident Frederick Goddard; Andrew was seriously injured. Goddard had no insurance; Wisconsin law makes Avis liable only for $25,000 to each victim. The Bethkes received $50,000 from Avis and then made a UIM claim with Auto-Owners, Kathryn’s insurance company. The UIM policy excludes coverage for accidents with a vehicle “owned or operated by a self-insurer,” and Avis had a certificate of self-insurance issued by the state. Auto-Owners refused to provide the coverage and the Bethkes sued. On cross-motions for a declaratory judgment, the circuit court sided with Auto-Owners, finding no coverage. On appeal, the court of appeals agreed, rejecting an argument that the clause at issue is ambiguous.
The Wisconsin Supreme Court, however, reversed the declaratory judgment grant. It agreed with the Bethkes that the term “self-insured” is ambiguous as used in the policy because it’s not clear who is a self-insurer under the policy’s terms. “Self-insurer” is not defined by the policy or Wisconsin law, the court noted, and legal writings have acknowledged that it is colloquial rather than precise. Though Avis in this case had a self-insurance certificate, it said, the purpose of the self-insurance statute—to make sure that the party can fully pay judgments—is contradictory to the statute limiting car rental companies’ liability. Thus, the court said, it’s not clear that a reasonable insured would understand that a car rental company with limited liability is a self-insurer under the policy. Furthermore, it said, even if the term is not ambiguous, applying the policy here leads to an absurd result. Auto-Owners itself agrees that self-insureds are excluded because they should be able to fully pay, and that is not true when Avis’s liability is limited by statute. Citing an Eighth Circuit case with similar facts, the court reversed and remanded.
As a St. Louis car crash lawyer, I appreciate this result. However, I wonder if the court considered modifying striking down the law that permits rental car companies to be “self-insured” in the first place. The majority pointed out that the self-insurance statute is intended for drivers who can pay the full amount of a verdict or settlement out of pocket. By contrast, the liability-limiting law for car rental companies guarantees that they will not be required to pay the full amount of a verdict or settlement arising out of a renter’s negligent driving. (They may still be required to pay the full amount for their own negligence.) Under those circumstances, it seems unwise for Wisconsin to certify car rental companies as self-insured for any purpose. As a southern Illinois auto accident attorney, I know injured families like the Bethkes need adequate payments to fund needed medical care, make ends meet and more.
If your family has been involved in a serious accident that was no fault of your own, don’t wait to call Carey, Danis & Lowe for help. You can reach us through our website or call us toll-free at 1-877-678-3400 today.
Similar blog posts:
High Court Rules Injured Drivers May Not Continue Lawsuits After Accepting UIM Settlement – Isaac v. Ho
Missouri Supreme Court Rules Injured Motorcyclist May Stack Underinsured Motorist Policies – Manner v. Schiermeier
Illinois High Court Rules Public Policy Does Not Bar Deadline in Car Insurance Contract – Country Preferred Insurance Co. v. Whitehead
