Current Issues in Underinsured and Uninsured Insurance Coverage in Missouri

II Underinsured Motor Vehicle Coverage

The purpose of underinsured motorist coverage (UIM) is to provide additional coverage for those injured by a negligent motorist where that motorist’s liability coverage does not fully pay for the injured party’s actual damage. Long v. Shelter Ins. Co., No. WD 73037, 2011 WL 3106966, at *2, (Mo. App. W.D. Jul. 26, 2011). Underinsurance coverage is floating insurance that follows the insured rather than a particular vehicle. Id. No statutory requirement mandates an insured purchase underinsured motorist coverage. Ritchie v. Allied Property & Cas. Inc. Co., 307 S.W.3d 132, 135 (Mo. banc. 2009). The definition of an underinsured motor vehicle is dictated by the terms of the policy. Harris v. Shelter Mut. Ins. Co., 141 S.W.3d 56, 62 (Mo. App. W.D. 2004). Previous court decisions determining UIM coverage are not controlling unless the insurance policy language is identical. Long, 2011 WL 3106966, at *7. The policy language will determine whether stacking underinsured coverage is permissible and whether an insurer is entitled to a set-off. Id.


Three recent Court of Appeals cases are instructive. Lynch v. Shelter Mutual Insurance Company and Shelter Mutual Insurance Company v. Straw both contain UIM language that the Southern District found unambiguous and therefore the insured could not stack the coverage and the insurer was allowed to set-off from the limits of the coverage (rather than from the total amount of damages) for previously recovered damages. Straw, 334 S.W.3d 592 (Mo. App. S.D. 2011); Lynch, 325 S.W.3d 531 (Mo. App. S.D. 2010). In contrast, in Long v. Shelter Insurance Companies, the Western District found the UIM language was ambiguous and therefore the insured could stack the coverage and the insurer could not set-off previously recovered damages against coverage limits. Long, No. WD 73037, 2011 WL 3106966 (Mo. App. W.D. Jul. 26, 2011). Comparing the language from the three insurance policies in these cases provides indicators for what courts may find ambiguous in future cases.

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