Uninsured Definition

Grand Prairie insurance lawyers will run across situations where the definition of “uninsured” is not clear. One of those situations was present in a recent Austin Court of Appeals case. The case is styled, Nealey Michelle Malham v. Government Employees Insurance Company.
Here is some relevant information.
Malham was injured in a motor vehicle accident in which the car in which she was a passenger was struck by a pickup truck owned by the City of Killeen and driven by a city employee while working. Malham sued the City and its employee alleging that she suffered injuries as the result of the employee’s negligent acts and that the City was vicariously liable for its employee. Malham settled her claims against the City and the employee in exchange for payment to her of $87,500. Thereafter, Malham filed a claim under the uninsured motorist coverage provision of her GEICO policy seeking to recover medical expenses related to back surgery she alleges was recommended to treat injuries sustained in the accident. In the underlying cause of action, Malham sought a declaration that the City vehicle that struck the car she was riding in was an “uninsured motor vehicle,” as that term is defined in her contract with GEICO, and that she was entitled to recover $300,000 from GEICO under the terms and conditions of the uninsured-motorist coverage contained in the policy. After a bench trial, the court rendered a final take-nothing judgment in GEICO’s favor. The court entered findings of fact and conclusions of law supporting its conclusion that GEICO was not liable to Malham for the payment of any uninsured motorist benefits under the terms and conditions of her GEICO policy. This appeal followed.
At the time of the accident, Malham’s GEICO policy contained the following Uninsured/Underinsured Motorist Coverage provision:
We will pay damages which a covered person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by a covered person, or property damage, caused by an accident.
The parties do not dispute that Malham is a “covered person” or that she was legally entitled to recover damages from the City as a result of the accident. The sole point of disagreement between the parties with respect to the above-quoted provision is whether the City vehicle that caused the accident was an “uninsured motor vehicle” under the GEICO policy.
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The GEICO policy contains, in pertinent part, the following definition:
I. “Uninsured motor vehicle” means a land motor vehicle or trailer of any type:
1. To which no liability bond or policy applies at the time of the accident.
II. However, “uninsured motor vehicle” does not include any vehicle or equipment:
2. Owned or operated by a self insurer under any applicable motor vehicle law.
3. Owned by any governmental body unless:
a. the operator of the vehicle is uninsured; and b. there is no statute imposing liability for damage because of bodily injury or property damage on the governmental body for an amount not less than the limit of liability for this coverage.
Malham contends that, under the foregoing provisions, the City-owned vehicle that struck the car in which she was a passenger was an “uninsured motor vehicle” under the GEICO policy definition and that the trial court erred in concluding otherwise.
The City is a party to a Liability/Property Interlocal Agreement (the “Agreement”), which creates the Texas Municipal League Joint Self-Insurance Fund (the “Fund”) for the purpose of “providing coverages against risks which are inherent in operating a political subdivision.” The City and other political subdivisions that are parties to the Agreement are referred to as “Pool Members.” The Agreement incorporates a Texas Municipal League Liability Self-Insurance Plan (the “Plan”) along with accompanying Declarations of Coverage. The liability coverage document associated with the Plan provides, in part, that “the Fund will pay on behalf of the Member or Covered Party all sums which the Member or Covered Party shall become legally obligated to pay as damages . . . because of bodily injury or property damage . . . arising out of the ownership, operation, use, loading, unloading or maintenance of an automobile.” “Covered Party” includes the Pool Member–in this case the City–and any employee of the City acting within the scope of his or her duties or employment. The associated “Automobile Declarations of Coverage” provide that the limit of liability for each occurrence is $2,000,000. The question before this Court, then, is whether the liability coverage provided for by the Agreement constitutes a “liability policy” as that term is used in the GEICO policy. The Court concluded that it did.
The court then discussed the meaning of words in the GEICO policy and the coverage provided by the City’s coverage.
These types of cases can be very complicated and an experienced Insurance Law Attorney needs to be involved early in order to discuss the best avenues to take in getting a favorable resolution.

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