SW Legal studies in Business

Uninsured Motorist Coverage Did Not Extend to Passenger Injured in Accident
Description Nebraska high court held that the uninsured motorist provision of an automobile insurance policy clearly stated who was covered. Its terms did not include a passenger in a car struck by an uninsured motorist. Insurers have the right to specify who is covered by a policy.
Topic Insurance
Key Words

Uninsured Motorist; Coverage

C A S E   S U M M A R Y
Facts Jones was the front-seat passenger in a car driven by Stastny. The car was hit by an uninsured vehicle that was responsible for the accident. Stastny’s car was covered by Shelter Insurance; the policy included uninsured motorist coverage. Jones’s vehicle, which was not involved in the accident, was covered by American Family Insurance. That policy also included uninsured motorist coverage. Shelter paid $25,000 in benefits to Stastny but denied payment to Jones. American Family paid Jones $60,000 of its $100,000 policy limit. Jones a release and assigned any rights he had against Shelter to American Family. Jones and American Family then sued Shelter to recover uninsured motorist benefits. The Shelter policy provided benefits in the amount of $50,000 per person or $100,000 per accident. The district court held for Shelter. Plaintiffs appealed.
Decision

Affirmed. The Shelter policy stated that it covered the owner, any relative, any person who lives with the insured or who is specifically named in the policy or who has permission to “use” the vehicle covered by the policy. “Use” of the vehicle means, as defined in the policy, “operation and maintenance” of the car. That would exclude Jones, as he is not a family member or otherwise listed on the policy. Being a passenger does not mean he operated or maintained the car. The insurance company has the right, by contract, to limit the parties covered by the policy so long as the policy clearly states the coverage, as this one did.

Citation Jones v. Shelter Mutual Insurance Co., 738 N.W.2d 840 (Sup. Ct., Neb., 2007)

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