Uninsured Motorist Coverage And Workers Compensation

Grand Prairie insurance attorneys will run into situations where a person who is covered by workers compensation insurance is injured in a vehicle where the at fault driver does not have liability insurance for themselves but the injured employee does have uninsured motorist coverage. If the person covered by workers compensation accepts workers compensation benefits does their uninsured motorist coverage also have to compensate them for their injuries?
This was answered in a 1973, Houston Court of Appeals [1st Dist.] case styled Hamaker v. American States Insurance Company of Texas. Here is some of the information from that case.
This is an appeal from a summary judgment for the defendant granted in a suit for damages brought under the uninsured motorist provision of an insurance policy. The crucial question concerns the validity of a provision in the policy permitting the insurer to reduce the amount payable under the terms of the policy by the amount the insured has received in workmen’s compensation payments.
The wording of the statute in force at the time said there was no coverage in the uninsured motorist portion of the policy. In declaring this part of the statute invalid, the court said the business of insurance is of public concern and therefore subject to strict regulation and control by the state. Hence the rights of parties to contract with respect to insurance are limited by the laws of the state which are a part of every such contract. And any stipulation in an insurance policy which contravenes the statute is void.
The Texas statute prohibits the delivery in this state of an automobile liability insurance policy unless coverage is provided therein in the limits described in the Texas Motor Vehicle Safety Responsibility Act for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles’ unless such coverage is rejected by the insured.
Part of the stated reason for the statute was stated as, “The fact that the people of Texas are constantly exposed to financial loss caused by negligent, financially irresponsible motorists, and the further fact that it is the intent and purpose of this Act to provide a means of protecting the conscientious and thoughtful motorist against such loss, thereby benefiting all the citizens of this state, constitutes an emergency . . .”
The Act provided that the insurer making payment to an insured under the coverage shall, to the extent thereof, be entitled to the proceeds of any settlement or judgment resulting from the exercise of any rights of recovery of such person against any person or organization legally responsible for the bodily injury, sickness or disease, or death for which such payment is made. In view of this provision it is significant that no provision was included granting such an insurer a right to withhold payment of sums due the insured in the amount of sums collected as workmen’s compensation benefits, or from other insurance. The declared purpose of the Act was to protect the people of Texas from financial loss caused by negligent financially irresponsible motorists. Such a purpose would be frustrated in many cases if the insurer is allowed to reduce its liability under its policy in the amount of workmen’s compensation benefits to which the insured is entitled by reason of his employment by an insured employer.
In conclusion this court said, “In conformity with the statute in the policy in question the insurer agrees ‘to pay all sums which the insured . . . shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile . . .’ The subsequent provision reducing ‘the amount payable’ because of bodily injury by ‘the amount paid and the present value of all amounts payable on account of such bodily injury under any workmen’s compensation law . . .’ reduces the coverage of the policy to an amount less than that required by law and, for that reason, is invalid.”