Underinsured Motorist Claim And Liability

Drivers in Grand Prairie, Weatherford, Arlington, Fort Worth, Dallas, Irving, Duncanville, De Soto, Mansfield, Crowley, Burleson, Benbrook, and other places in Texas may wonder how the liability portion and underinsured portion of their automobile policy work. To begin with, there is not a short simple answer. Each situation has to be looked at and the policy read in conjunction with a particular fact scenario. Certainly one of the first things to do is to get with an experienced Insurance Law Attorney. That attorney would know the questions to ask and what to look at to give reliable guidance.
Here is a case for thought. The case is George Rosales and Ester Rivera v. State Farm Mutual Automobile Insurance Company. This case was decided by the Austin Court of Appeals in 1992.
George Rosales and Ester Rivera sued State Farm Mutual Automobile Insurance to recover underinsured motorist (UIM) benefits under a Texas Standard Liability Policy issued to Sharon Barrett. The trial court concluded that Rosales and Rivera could not obtain liability and UIM benefits under a single insurance policy, and granted summary judgment in favor of State Farm. This appeals court affirmed the trial court ruling.
Here are the facts. On March 3, 1990, Rosales and Rivera were passengers in Barrett’s 1987 Ford Tempo when it collided with another vehicle. It was undisputed that Barrett caused the accident, and that Rosales and Rivera were seriously injured. Barrett carried a State Farm automobile-insurance policy that provided liability and uninsured/underinsured motorist (UM/UIM) coverage. State Farm paid Rosales and Rivera $25,000 each, the maximum amount of bodily-injury liability insurance available per person under Barrett’s policy. In addition, Rosales and Rivera received UIM benefits from their own insurance policies. Rosales and Rivera also made claims for UIM benefits under the Barrett policy, but State Farm denied those claims.
Rosales and Rivera filed suit against State Farm, seeking recovery of UIM benefits under Barrett’s policy, and other claims not relevant here. State Farm moved for summary judgment on the ground that it had no obligation to pay UIM benefits to Rosales and Rivera because Barrett’s vehicle was not an underinsured vehicle according to the policy’s terms.
The legal discussion was that Rosales and Rivera contended that the trial court incorrectly applied Texas substantive law in rendering judgment in favor of State Farm. They argued that State Farm incorrectly applied an exclusion in Barrett’s policy to deny them benefits. State Farm responded that Rosales and Rivera are not entitled to UM/UIM benefits because, by definition, Barrett’s vehicle is not an underinsured vehicle.
The appeals court pointed out that Barrett’s policy specifies that UM/UIM vehicles do not include vehicles owned by or furnished or available for the regular use of the named insured. Both sides stipulated that Barrett was the named insured on the policy at issue in this cause, and that Rosales and Rivera were riding in a vehicle “owned by or available for the regular use of Sharon Barrett” at the time of the accident. From these stipulated facts, the court concluded that the policy’s unambiguous language supports State Farm’s coverage position.
Rosales and Rivera made other arguements but were overruled on these other issues also. In closing the court stated, “State Farm argues that Barrett did not purchase UIM coverage for the purpose of increasing her own policy limits or protecting her passengers from her own negligence, but as protection from the negligence of other uninsured and underinsured drivers. State Farm contends that permitting Rosales and Rivera to recover both liability and UIM payments under Barrett’s policy would effectively convert UIM coverage into a second layer of liability coverage, a result not contemplated by the parties to the policy and not calculated in the cost of the policy premium. We agree with State Farm and conclude that UIM coverage is not available for damages sustained by a passenger who has already recovered the full amount of liability limits under the same policy.”
So, with Rosales and Rivera having recovered the liability limits under Barrett’s policy, they were precluded from recovering the remainder of their damages under the UIM provision of that same policy.