Confusion Involving Uninsured/Underinsured Motorist Policy Leaves Woman in Caddo Parish Without Coverage

padlock_grating_insurance_security-scaledBefore purchasing motor vehicle insurance, it is vital to fully understand what the policies will cover. For instance, some policies may not cover your medical bills if you were involved in a single-vehicle accident. Understanding what is covered and what is not may help you avoid legal action in the future.

Randy and Brenda Mills, husband, and wife, purchased separate uninsured/underinsured motorist (“UM”) coverage from State Farm on three of their vehicles: a Kawasaki motorcycle, a GMC Envoy, and a Chevy pickup. The policies on each of the three vehicles also included liability coverage. However, the UM and liability insurance policies for the motorcycle were in Randy’s name only, while the UM and liability insurance policies for the other two vehicles included Randy’s and Brenda’s names. 

One morning, Randy was driving the motorcycle with Brenda as a passenger when he lost control, went off the road, and entered a ditch. Brenda alleged that she suffered severe injuries and was hospitalized for three days. She claimed that, as a result of these injuries, her medical bills exceed $42,545. She also claimed lost wages, loss of employment benefits, emotional damages, and loss of enjoyment of life. State Farm then paid Brenda the $50,000 policy limit owed under the liability policy purchased by Randy on the motorcycle. However, State Farm declined to pay her for any of the UM benefits under the three separate policies. 

Brenda brought a claim for UM coverage to the Louisiana First Judicial District Court for Caddo, asserting the liability policy amount was insufficient to cover her losses. State Farm filed a motion for summary judgment. The District Court granted State Farm’s motion for summary judgment and dismissed Brenda’s claim for UM coverage, finding that UM coverage did not apply to one-vehicle accidents. Brenda appealed this decision to the Louisiana Second Circuit Court of Appeal. 

According to Louisiana law, a court must grant a motion for summary judgment if the evidence shows no genuine issue as to a material fact. La. C.C.P. art. 966. Additionally, an insurance policy is a contract between the two parties, and the words and phrases of the policy are to be construed using their plain, ordinary meaning. La. C.C. art 2047. In Brenda’s case, the Court of Appeal found no ambiguous terms in the policy. 

For her first argument on appeal, Brenda claimed that the UM statute in the contract with State Farm allows a guest passenger of an at-fault vehicle to recover under the driver’s UM coverage when the driver’s liability coverage is inadequate to cover the guest’s damages. The Court of Appeal, however, found the applicable law repeated State Farm’s policy exclusion that UM coverage does not apply when the insured was injured while occupying a motor vehicle owned by the insured. La. R.S. 22:1295(1)(e)

Furthermore, the Court of Appeal found the motorcycle was purchased during Brenda and Randy’s marriage, which makes it community property, meaning it is property acquired during marriage that is divided equally, 50/50, between the spouses. Property owned by one spouse but not the other would be considered separate property. The Court of Appeal found the motorcycle to be community property. Therefore, the Court of Appeal held that the UM statute did not support coverage. 

For her second argument, Brenda claimed that the literal interpretation of the UM Insuring Agreement provided UM coverage. Nevertheless, the Court of Appeal found that Brenda failed to consider the definition of an uninsured motor vehicle and the exclusion provision of the agreement. State Farm’s policy excluded vehicles whose policy provided liability coverage, which the motorcycle did, and an uninsured motor vehicle also excluded a vehicle owned by the insured or resident relative. Therefore, the Court of Appeal held that the insurance agreement did not support UM coverage for Brenda as a resident relative of the insured.   

Next, the Court of Appeal found that the District Court was correct in denying Brenda’s attempt to recover under the UM provision of the motorcycle’s policy, as the motorcycle cannot act as both an insured and uninsured vehicle for a single policy. State Farm paid Brenda damages under the liability provision but was not required to pay her under the UM provision. The Court of Appeal also denied Brenda’s claim that she has a right to recover under other UM policies since Louisiana law makes clear that insureds cannot stack UM coverage under more than one policy.  La. R.S. 22:1295(1)(c). As a result, Brenda was precluded from recovering under the UM provisions of the GMC or Chevy.  

This case demonstrates the need to understand insurance policies and their exclusions on every motor vehicle you own. In addition, understanding said policies might help you avoid lengthy and expensive legal trials. If you have an insurance contract dispute, however, you may need the help of an experienced attorney.         


Written by Berniard Law Firm Blog Writer: Samantha Calhoun

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