SW Legal studies in Business

Injured Party May Not Collect Twice Based on Underinsured Motorist Coverage
Description

Appeals court held that a person injured by another driver, who had underinsured motorist coverage, may not collect against his own insurance company if the other party’s insurer voluntarily pays above the policy limit and thereby satisfies the jury verdict.

Topic Insurance
Key Words

Underinsured Motorist; Damages

C A S E   S U M M A R Y
Facts

A vehicle driven by Smith struck Hamill as he walked in a parking lot. Hamill sued Smith for his injuries. Smith’s insurance policy provided up to $100,000 bodily injury for a single person injury, but her insurer told her it would “pay the amount of any judgment or settlement” against her in the lawsuit. A jury awarded Hamill $165,000. Hamill submitted an underinsured motorist claim to Mid-Century, his insurance company, to cover the damage award above the $100,000 limit in Smith’s policy. Meantime, Smith appealed the jury verdict and settled with Hamill for $152,000, which Smith’s insurer paid. Hamill agreed to go to arbitration with Mid-Century. The arbitrator determined damages to be $140,000 minus 10% liability for fault assigned to Hamill, reducing the damages to $126,000. Mid-Century refused to pay Hamill anything since Smith’s insurance company paid $152,000 despite the $100,000 limit in Smith’s policy. The trial court granted summary judgment to Mid-Century. Hamill appealed, contending his company should pay him $26,000.

Decision

Affirmed. The $100,000 limit was irrelevant since Smith’s insurance company volunteered to pay damages above $100,000, meaning that the underinsured motorist provision of Hamill’s policy became irrelevant and his company owed him nothing. Underlying the underinsured motorist statute is a policy of full but single coverage, so Hamill may not recover twice.

Citation

Hamill v. Mid-Century Insurance, ---P.3d--- (2010 WL 3449119, Ct. App., Az., 2010)

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