In a Fifth Circuit Court of Appeal case, the court addressed what kind of insurance coverage applied to an accident victim covered by the insurance policy. The policy provided for bodily injury coverage as well as uninsured/underinsured motorist coverage. The insurance company contended that bodily injury coverage applied, including an exclusion that applied to those repairing or servicing their vehicle.
When interpreting an insurance policy, the courts turn to contract law. This requires an interpretation based on the plain language of the contract, and it also requires the court to ensure that the insurance policy does not violate public policy. Here, plaintiff Jeremy Elliot was in the course and scope of his employment with Mercedes-Benz Baton Rouge when he was rear-ended by a vehicle driven by Andre Holmes. Mr. Elliot sued Mr. Holmes and his insurer, State Farm Mutual Automobile Insurance Company, for the resulting damages. Mr. Elliot also named Mr. Holmes’ uninsured/underinsured motorist insurer, Safe Auto Insurance Company. Mr. Elliot settled his claims with State Farm, dismissing them from the suit.
Mr. Elliot then filed a separate lawsuit against Encompass, the insurer of the vehicle he had been traveling in at the time of the accident. He also sued his employer’s insurer, Travelers Indemnity Company, seeking uninsured/underinsured motorist coverage for the accident.
Travelers filed a summary judgment motion, seeking a declaration that Encompass provided Mr. Elliot with uninsured/underinsured motorist coverage with limits of $500,000. Encompass filed a summary judgment motion, seeking a declaration that its own uninsured/underinsured motorist coverage was limited to $15,000.
Encompass appealed the trial court’s order granting summary judgment in favor of Travelers. The judgment declared that the Encompass policy included $500,000 in uninsured/underinsured motorist coverage for the underlying accident.
The parties agreed on the facts surrounding the accident, but they disagreed on the amount of uninsured/underinsured coverage provided under the Encompass policy. While Travelers maintained that its policy provided $500,000 in coverage, Encompass asserted its policy provided $15,000 in coverage for Mr. Elliot’s accident.
In support of their position, Encompass stated that the policy contained an exclusion for coverage, except for the $15,000 required by law, for people engaging in repairing or servicing their motor vehicles. Since Mr. Elliot, at the time of the accident, was servicing a vehicle, the exclusion applied. Mr. Elliot was covered for $15,000.
Travelers contended that the policy coverage in the Encompass policy was $500,000 and that the exclusion did not apply to uninsured/underinsured motorist coverage.
The trial court rendered a judgment in favor of Travelers, finding that Encompass was to provide uninsured/underinsured motorist coverage in the amount of $500,000.
The appellate court stated their standard of review and their emphasis on the interpretation of the insurance policy as a contract. Furthermore, the court stated that an insurance company may limit coverage, provided the limitations do not conflict with public policy.
Turning to the contract, the court stated that the Encompass policy maintained motor vehicle liability coverage for bodily injury of $500,000 per person with the same limit per accident. Uninsured motorist coverage was $500,000 per person with the same limit per accident.
Here, the parties agreed that Mr. Elliot was covered under the policy because he was operating a covered vehicle. But he was also in the course and scope of his employment, as a service technician. This exclusion is what led Encompass to provide Mr. Elliot with liability coverage for $15,000.
As an endorsement, the uninsured/underinsured coverage stated the terms for a “covered person,” which applied to Mr. Elliot. The court again stated that there was no issue as to whether Mr. Elliot was insured. The issue was whether Encompass must provide greater coverage through its uninsured/underinsured motorist coverage than through its liability coverage.
The court focused on the fact that the uninsured/underinsured coverage had been provided to Mr. Elliot under the policy, since he had occupied the covered vehicle. While the uninsured/underinsured policy listed exclusions for coverage, none of these applied to Mr. Elliot. In contrast, the liability section of the policy had an exclusion that applied to Mr. Elliot, due to his status as a technician on a covered vehicle.
According to the appellate court, the clear words of the policy demonstrated that greater uninsured/underinsured coverage extended to Mr. Elliot. Finally, the court stated it does not go against public policy to provide Mr. Elliot with more coverage.
The court affirmed the trial court’s judgment that the Encompass policy provides $500,000 for Mr. Elliot’s accident.
At Lavis Law, we have years of experience negotiating and litigating automobile insurance cases. We provide a free consultation and can be reached by calling 866.558.9151.
More Blog Posts:
Louisiana Appeals Court Holds Plaintiff Has Burden of Proving His Entitlement to Recovery Under Uninsured Motorist Coverage, Louisiana Insurance Lawyer Blog, August 25, 2015
Louisiana Appeals Court Affirms Insurance Company Has No Responsibility to Provide “Blanket Coverage” for all Vehicles, Louisiana Insurance Lawyer Blog, June 25, 2015