JEFFERSON CITY, Mo. (Legal Newsline) – The Missouri Supreme Court this month reversed a lower court’s judgment that found in favor of a couple trying to recover damages through their insurance policy, instead siding with the insurer.
Policyholders Vicki and Chris Craig brought a case against Owners Insurance Co. seeking recovery of the full liability limits set out in their policy.
Vicki Craig had been injured in a car accident, incurring damages more than $300,000. Though the at-fault motorist did have insurance coverage, the liability limit was only $50,000, which the Craigs recovered.
The Craigs then turned to their own insurance provider, Owners, to recover the remaining $250,000 in damages through their Underinsured Motorist (UIM) coverage.
The Craigs’ policy lists $250,000 per person as the UIM limit, but as the court’s written decision notes, the policy also states clearly: “The Limits of Liability stated in the Declarations for Underinsured Motorist Coverage are for reference purposes only. Under no circumstances do we have a duty to pay you or any person entitled to Underinsured Motorist Coverage under this policy the entire Limits of Liability stated in the Declarations for this coverage.”
The policy continues to lay out “set-off” provisions, stating “Owners will pay the declarations’ listed limit amount minus what is paid by the underinsured motorist’s policy if damages exceed the declarations’ listed limit amount, or damages minus what is paid by the underinsured motorist’s policy if damages do not exceed the declarations’ listed limit amount,” according to the high court’s written decision.
Though Owners maintains that the policy is clear in setting out the terms for the $50,000 set-off, the Craigs argued the policy is ambiguous “because, despite the language in the UIM endorsement, the declarations list $250,000 as the UIM limit and other portions of the policy reference the declarations as containing or describing the policy’s limits of liability,” the decision states.
Though the circuit court agreed with the Craigs and entered summary judgment in their favor, most of the Supreme Court judges found, in their decision filed April 4, that the policy “unambiguously provides that the declarations’ listed limit amount serves only as a reference point for use with the set-off provisions, which are likewise unambiguous.”
Therefore, the previous judgment was reversed and the case remanded.
In a separate, dissenting opinion, Judge George W. Draper III found that when the policy is read as a whole, there is indeed ambiguity to the coverage.
“Here, Insured chose to pay for $250,000 per person and $500,000 per occurrence in UIM coverage, not $250,000 minus the amount recovered from the underinsured driver who caused more damage than the driver was insured to pay," Draper wrote. "Because Owners’ policy appears in one section to provide any underinsurance coverage in excess of other coverage and another section prevents the full recovery of the declared policy limits without exception, there is an ambiguity…
"Accordingly, I would affirm the trial court’s judgment.”