Underinsured Motorist Coverage In Texas Commercial Policies

What if someone in Grand Prairie, Arlington, Duncanville, Mansfield, Burleson, Weatherford, Fort Worth, or some other city in Texas is involved in an accident, as an employee, with an underinsured driver? Does the employers underinsured portion of their insurance policy provide coverage?
This was the issue in a May 12, 2010 case decided by District Judge, T. John Ward, of the United States District Court, E.D. Texas, Marshall Division. The style of the case is, Dean and Parwana Amanzoui, Individually and as next friends of Fahim Amanzoui and Sabrina Amanzoui v. Universal Underwriters Insurance Company.
In this case, Parwana Amanzoui (Parwana) was riding in an automobile driven by her husband, Dean Amanzoui, and owned by her husband’s employer, the Huffines Automotive Group (Huffines). At the time of the accident, Huffines carried its insurance with Universal Underwriters Insurance Group (Universal) pursuant to a multiple coverage policy. Coverage under the policy for underinsured motorist (UIM) was limited. “Insureds” for purposes of UIM coverage was expressly limited to three categories of persons: (1) persons designated on the declarations as subject to the UIM policy, (2) family members of persons designated in the UIM policy, and (3) persons occupying vehicles driven by someone falling within category no. 1 or no. 2. It was uncontested that Parwana was not included in this list.
Texas Insurance Code, Section 1952.101, was relied on by both sides of this case.
The material facts in this case were not in dispute. The sole issue was whether the policy language above provided coverage to Parwana.
Citing Section 1952.101, Parwana argued that Texas law does not allow Huffines to accept liability coverage for its “friends and family” while excluding occupants of otherwise covered vehicles and individuals who are otherwise “insured” under the policy. Thus, Universal’s efforts to impose restrictions not found in the statute are improper and ineffective as attempts to void or narrow the scope of insurance coverage specified by the Texas legislature in drafting the statute.
The finding of this Court was that the policy was clear and unambiguous that Parwana was not entitled to recover UIM benefits. The Court explained by saying that Parwana can only be an insured if she qualified as an individual designated in the declarations, a family member of such individual, or a passenger in a covered auto driven by these individuals. She did not qualify.
The Court found that if Huffines had the legal right to reject the UIM coverage in toto per Section 1952.101, that it had the right to restrict UIM coverage to selected individuals. Further, the Texas Supreme Court, in a 1997 case, Grain Dealers Mutual Insurance Company v. McKee, has held that it is not against public policy to limit UIM insureds to certain individuals.
The important point in this case was the ruling by the Court that certain persons can, pursuant to the insurance contract, be covered by UIM coverage while others are excluded from the same coverage.
Whenever this isssue comes up, it is important to carefully read the policy.