Current Issues in Underinsured and Uninsured Insurance Coverage in Missouri

Long v. Shelter Insurance Companies

In Long v. Shelter Insurance Companies, the Western District Court of Appeals found the policy language was ambiguous and allowed the plaintiff to stack the UIM policies. No. WD 73037, 2011 WL 3106966, at *6, (Mo. App. W.D. Jul. 26, 2011). In Long, the insured sued Shelter Insurance Companies for UIM coverage for the wrongful death of her husband. Id. at *1. The insured sustained at least $450,000 in damages and had previously received $50,000 from the tortfeasor’s insurer. Id.The Longs had $100,000 per person UIM coverage with Shelter for the vehicle involved in the accident. Id. The Longs had six other Shelter polices, each with $50,000 per person UIM coverage. Id. Shelter claimed its obligation was satisfied with a payment of $50,000 because only the driven vehicle policy was applicable and that the $100,000 coverage limit was subject to a set-off of $50,000 for the money previously paid on behalf of the tortfeasor. Id. Long claimed, as the policy was ambiguous, she could stack all seven policies, and Shelter could not set-off the previous proceeds. Id.The Western District decision on stacking was based on the ambiguity created by the Shelter policy in promising coverage in one provision and taking it away in another. Id. at *6. Long argued the “OTHER INSURANCE” Excess Clause promised the UIM coverage was “excess coverage over all other UIM benefits, including other UIM benefits sold by Shelter,” but then the anti-stacking language in the “OTHER INSURANCE IN THE COMPANY” paragraph took the coverage away and this conflict created an ambiguity that entitled Long to stack the UIM coverage. Id. at *4.Shelter claimed the Pro Rata clause in the “OTHER INSURANCE” section fixed any ambiguity the excess clause created. Id. at 5. The Western District found this argument contrary to rules regarding ambiguity. Id. Specifically, the court noted that it must look at the policy provisions as a whole rather than in isolation. Id. (citing Seeck, 212 S.W.3d at 133). Furthermore, any provisions that read in isolation prohibit stacking, while others allow stacking, create an ambiguity that is resolved in favor of the insured. Id. (citing Ritchie v. Allied Prop. & Cas. Ins. Co., 307 S.W.3d 132, 144 (Mo. banc 2009)).Shelter also argued the policy in Long was unambiguous just as the Shelter policy was in Lynch. Id. Again, the Western District disagreed and found the Long policy distinguishable from the Lynch policy. Id. The policies had “substantially similar” insuring agreement language. Id. Nonetheless, the UIM “Limit of Liability” provision in Lynch specifically stated the coverage could not be “stacked” while the Long policy had no such provision. Id.

“Limits of Our Liability” provision in Long “Limits of Our Liability” provision in Lynch
The limits of liability for this coverage are stated in the Declarations and are subject to the following limitations:(4) The limits are reduced by the amount paid, or payable, to the insured for damages by, or for, any person who:(a) is legally liable for the bodily injury to that insured; or(b) may be held legally liable for the bodily injury to that insured.Long, 2011 WL 3106966 at *8. The limit of liability for this Coverage will be the limit of liability stated for this particular endorsement number in the Declarations, subject to the following limitations:(2) The limit of liability stated in the Declarations will be reduced by all amounts paid or payable to the insured making the claim by, or on behalf of, all persons legally obligated to pay any portion of the damages to the insured.(5) Regardless of the number of:(a) vehicles involved in the accident,(b) persons insured,

(c) claims made, or

(d) premiums paid, the limits for this Coverage may not be added to, combined with, or STACKED onto the limits of other underinsured motorists coverage available to any insured for any one accident.

Lynch, 325 S.W.3d at 534 (emphasis added).

Additionally, the “Other Insurance” clauses in the two polices were “substantially different.” Long, 2011 WL 3106966 at *6. In the Lynch policy, the “Other Insurance” expressly prohibited stacking and specified that the UIM coverage was excess over other company’s UIM coverage, but this specificity was lacking in the Longs’ policy. Id.

“Other Insurance” Provision in Long “Other Insurance” Provision in Lynch
If an insured suffers bodily injury for which benefits are payable under this coverage, it applies as excess insurance over all other underinsured motorist insurance available to that insured.If underinsured motorist insurance is provided to an insured by one or more other insurance policies and it is impossible to reconcile the provisions of all applicable policies so as to determine the order in which benefits are payable under each, the benefits of this policy will be prorated, with all such other policies, based on the limits of each, up to the limit of the policy with the highest limit.Long, 2011 WL 3106966 at *4. If an insured’s claim under this Coverage arises out of bodily injury sustained while occupying the described auto, no other policy of underinsured motorist insurance, issued by us will apply to such a claim. However, the insurance provided by this coverage will apply as excess insurance over any other company’s underinsured motorist insurance available to the insured as a result of the same accident. The insurance under this policy will then apply only if the total of the limits of all such other insurance is less than the limit of liability of this Coverage. In that instance, we will be liable, under this Coverage, for only that amount by which its limits of liability exceeds the total limits of all such other insurance.Lynch, 325 S.W.3d at 534.

An ambiguity was created by the appearance of coverage in one clause with another clause indicating coverage was not provided. Id. Therefore, the court ruled against the insurer and allowed Long to stack the UIM policies. Id.

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