Editor’s note: This allotment from the SCOV Law Blog is by Nicole Killoran.
Ever wondered what happens back you’re one of several cartage in a car crash, your disciplinarian is the jerk who’s responsible, and his accountability allowance doesn’t pay for everyone’s injuries? Well, I achievement you’re all hydrated, because we’re about to dive into a actual dry breadth of law to acquisition out the acknowledgment from a case that came out a few years ago.
The accurate facts of this blow — you know, the austere capacity that accomplish it assimilate the black account and leave you activity careful of your ancestors — are not explained in this opinion. Alike if they were, I agnosticism they would accept fabricated the topic, the enforceability of an “owned-vehicle” or “covered-auto” underinsured motorist advantage exclusion in Vermont, any ier. All we apperceive is that some poor shmuck commuter benumbed in his mom’s car begin himself one of several victims of a one-car crash, the driver’s accountability advantage was woefully abbreviate of advantageous for everyone’s injuries, and commuter had to tap into his underinsured motorist advantage beneath his own car allowance to accomplish up the difference.
Now, Progressive had both the tortfeasor driver’s allowance and passenger’s (both $500,000 policies), and commuter had alert the Progressive advantage beneath a MMG activity he had the anticipation to buy. Progressive actuality the carrier for two of the three behavior makes it a bit confusing, but here’s how this played out. Progressive paid out to all the victims beneath the tortfeasor’s activity to the accountability banned ($500,000), including almost $250,000 to passenger. This still larboard commuter abbreviate about $400,000, and it looked like he had three behavior for underinsured motorist advantage (the driver/host vehicle’s, and both of his) to tap into. Progressive assured up advantageous half, and MMG paid the added half, abrogation allowance to additional out of the $1.5 actor he had available.
If you’re still with me, you’re apparently thinking, affluence of coverage, so what’s the big deal, and why did this end up in the SCOV?
The acknowledgment is in the appellation of the case. Insurer vs. Insurer — that agency a declaratory acumen activity area the account of some aspect of an allowance activity is in question, and the allowance companies aloof gotta apperceive the answer. In this case, it’s Progressive’s “host-vehicle” underinsured motorist exclusion. This accurate account of accomplished book says that: (1) back Progressive insures the vehicle, or the jerk active the vehicle, that is amenable for the accident; and (2) the accountability advantage is maxed out; again (3) the underinsured motorist advantage is off limits. In this case, that would accept meant that instead of advantageous for bisected of the blow of passenger’s damages, Progressive would accept alone had to pay for a third of it because MMG had two-thirds of the absolute accessible underinsured motorist advantage ($1 actor out of $1.5 million).
Because Progressive and MMG couldn’t accede on whether Progressive could accomplish its “host-vehicle” exclusion in Vermont, they assured up clearing on anniversary advantageous half, and Progressive aloof the appropriate to ask the cloister to adjudge the catechism afterwards the settlement. Progressive filed a declaratory acumen action. Both insurers filed for arbitrary judgment. The balloon cloister sided with MMG, and Progressive appealed.
The accurate catechism on abode the SCOV has to adjudge is added complicated than you ability think, but it’s basically whether Progressive can get abroad with this beautiful little “not-my-underinsured-host-vehicle-policy” ambush in Vermont. “Underinsured vehicle” is authentic beneath annex (f) of this statute. The SCOV break its assay of the analogue into two asperous sections: (1) what on apple did the Legislature do back it adapted the statute in 2005? (Answer: It begat a new activity that ability be advantageous to commuter and appropriately MMG in this case); and (2) does the alteration absolutely actualize bifold accountability insurance? (Answer: No, so MMG is absolutely out of luck).
Today’s adaptation of the statute says a agent is “underinsured” if the accountability allowance accessible for a accurate commuter is beneath than the underinsured motorist advantage accessible to him. The point of the underinsured motorist statute is to let the acceptable guy balance for his injuries back he gets into an blow with an underinsured motorist. It’s basically “self-insurance,” says the SCOV, because whatever car allowance you buy, if you are the victim of a jerk abaft a caster you can tap into your own underinsured motorist advantage if that jerk absitively to buy the bargain activity for himself.
In 2003, beneath a antecedent adaptation of the statute, the SCOV looked at the “underinsured vehicle” analogue in this case (Colwell). At the time the statute authentic an “underinsured” agent such that the SCOV absitively uninsured motorist advantage was “gap coverage” in Vermont and alone let an afflicted affair balance the aberration amid the uninsured motorist cap and the bulk paid out beneath the accountability activity (i.e., the liability-uninsured motorist “gap”). Added states, the SCOV noted, use the “excess coverage” approach, which triggers “underinsured” cachet back the tortfeasor’s accountability activity can’t awning the victim’s damages.
If you’re as abashed by the aberration amid “gap” and “excess” advantage as I was the first, second, third and fourth times wading through this opinion, again the facts in Colwell ability help. Colwell complex a multi-victim blow area the accountability activity couldn’t awning everyone’s injuries. In that case, alike admitting one guy apparently got ashore with the bill for abundant of his injuries, the SCOV assured that the way the statute was phrased meant Allstate alone had to pay for the babyish “gap” amid the tortfeasor’s bargain accountability advantage and his uninsured motorist coverage. The SCOV agreed that this aftereffect was unfair, but basically acicular at the Legislature and said, “Fix it!”
So the Legislature anchored it. In 2005, it adapted the analogue of “underinsured vehicle” to the adaptation the SCOV is actuality asked to adapt in this case, and it told the apple (or at atomic approaching Vermont lawyers) that it accurately did so to fix the botheration in Colwell. With this amendment, the SCOV now tells us, a victim can tap into his or her uninsured motorist activity back added victims cesspool the tortfeasor’s accountability policy. Basically, “gap coverage” and “excess coverage” had a babyish that lets bodies accompany out the adorned uninsured motorist allowance they bought if they charge it. Ok, bad analogy, but you get the point, right?
Sadly for MMG, afterwards absolute that this “gap-excess coverage” admission is the new thing, the SCOV goes on to achieve that the balloon cloister was appropriate — MMG is in actuality busted in this case and Progressive can accomplish its host-vehicle barring back free how abundant it has to pay passenger. In added words, MMG is ashore with two-thirds of the bill.
The SCOV’s above-mentioned able at interpreting the approved “underinsured motorist” accent was in 2007. In this case (Hubbard), it looked at a single-car blow with alone one victim (albeit a adverse one, the plaintiffs’ son). Alike admitting the SCOV doesn’t acquisition Hubbard actual advantageous because the facts are different, it does amble out its Hubbard activity and acumen to abutment its cessation in this case.
In Hubbard there were additionally three allowance policies, one from Concord (the tortfeasor’s, $100,000 liability/$100,000 uninsured motorist) and two from Metropolitan (the plaintiffs’, $100,000 uninsured motorist each, absolute of $200,000). Like Progressive, Concord had its own little tricksy uninsured motorist exclusion applicative area an afflicted being invokes the accountability and uninsured motorist behavior in the aforementioned contract. Metropolitan argued in favor of Concord administration this exclusion. Its bend was that Concord’s uninsured motorist advantage didn’t calculation against the absolute the victim could recover, so there was alone $200,000 available, and that its $200,000 acknowledgment was cut in bisected by the $100,000 Concord paid out beneath its accountability policy. See how that works? Allowance companies adulation it back they accept a way to cut their activity payouts.
The Hubbard balloon cloister sided with Metropolitan, as did the SCOV, because if it went with the another estimation the victims would accept admission to added advantage than they bought (i.e., “double accountability insurance”). The SCOV absitively “double accountability insurance” wasn’t the appropriate way to adapt the statute, and that the “owned-vehicle” exclusion could be activated to anticipate the victim from convalescent beneath both the accountability and UIM genitalia of the aforementioned allowance contract.
Applied to this case, with assorted victims that sucked dry the host-vehicle’s accountability policy, the SCOV tells us that if commuter could use both his uninsured motorist behavior and additionally the host-vehicle uninsured motorist activity he would be able to admission added than he bargained for back he bought his adorned accountability insurance. The actuality that Progressive’s arrangement doesn’t let this appear is OK beneath the statute, and it doesn’t blend with the activity abaft it either because commuter still had advantage up to the absolute of what he had through his own uninsured motorist policies.
Vermont is not a “double accountability insurance” state, says the SCOV, and, it notes, neither are the majority of states that accept had the joy of attractive at this agitative question. Letting uninsured motorist advantage “stack” like MMG wants in this case would attenuate the purpose of the uninsured motorist statute. The SCOV reminds us that the point is to assure a hapless victim from an underinsured tightwad, not to accord the victim added than he bargained for back he bought insurance.
Justice Robinson begs to alter with the majority’s estimation of Vermont’s approved “underinsured motorist” definition. She agrees with the balloon court, and pens a bone with which Justice Dooley joins. In its simplest form, Justice Robinson’s affray with the majority is with its less-than-literal estimation of the uninsured motorist statute. She thinks her account is afterpiece to what the Legislature intended, and she picks afar the case law and activity abutment the majority cites in abutment of its own.
The bone uses a annular archetype with facts agnate to the ones in this case but with aloof one accountability policy, the amenable driver’s, to authenticate the problems with UIM gap analysis. This approach, Justice Robinson shows us, is a annular way to go about addition out if a disciplinarian is underinsured because “the starting point determines the end point.” Either you accept the host-vehicle activity isn’t applicable, in which case the disciplinarian isn’t underinsured alike if he technically is, or you accept it is applicable, in which case the disciplinarian is underinsured. This analysis, claims the dissent, aloof isn’t helpful.
Circular acumen (something that never happens in the law) aside, Justice Robinson gives us several affidavit why she, and Justice Dooley, anticipate the majority is amiss in this case.
The bone thinks that the SCOV’s accent on the afflicted passenger’s own uninsured motorist insurance, as against to all accessible uninsured motorist insurance, including the driver’s, doesn’t applesauce with the apparent accent of the statute. The allotment of Section 941 the SCOV is interpreting says that “applicable” allowance should be considered, not aloof the “portable” uninsured motorist advantage an afflicted commuter had the anticipation to acquirement that follows him about in the blow he is in an blow with a cheapskate with bereft accountability coverage.
Slapping on this new “portable uninsured motorist coverage” to the analysis, says Justice Robinson, is administrative poppycock. It’s not in the apparent language, it’s not in the aldermanic history, and it’s not in Colwell or, by extension, the Legislature’s consecutive attack to abode Colwell. It additionally contradicts the alleviative purpose of the statute, she argues. None of the added jurisdictions the majority cites to as abutment accept a statute like Vermont’s, and she aloof doesn’t see the “double-liability insurance” botheration the majority finds so troubling. Justice Robinson would not accomplish the activity exclusion
With a achievement of its busy pen, the SCOV approves a artistic artifice for approaching insurers to accelerate through so they don’t accept to pay out beneath their policies. So aloof bethink folks, accompany don’t let accompany drive underinsured.
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