Current Issues in Underinsured and Uninsured Insurance Coverage in Missouri
Shelter Mutual Insurance Company v. Straw
|In Shelter Mutual Insurance Company v. Straw, the Southern District found the limits of insured’s liability clause language to be nearly identical to that in Lynch and therefore unambiguous and enforceable. 334 S.W.3d 592, 596 (Mo. App. S.D. 2011). In Straw, Loyd Straw was injured in an automobile collision caused by Paula Heiskell. Id. at 594. Straw received $100,000 from Heiskell’s liability insurer, Farmers Insurance Group. Id. Straw also had an underinsured motorist policy with a $100,000 limit with Shelter Mutual Insurance Company. Id.Shelter filed a Declaratory Judgment motion to determine whether their insurance policy provided UIM coverage for Straw for this collision. Id. Shelter argued the policy contained a set-off provision reducing the coverage limit by the amount of other damages paid to the insured. Id. at 595. With $100,000 coverage limit and $100,000 in damages already paid to Straw by Farmers Insurance, Shelter would not owe Straw anything. Id. at 597-98.The parties agreed to a joint stipulation of facts including a value of damages greater than or equal to $200,000 and stipulated that the court could find either Straw had no coverage under the UIM policy with Shelter or that the Shelter policy provided $100,000 in coverage to Straw. Id. at 594. The trial court could reach no other result. Id. The trial court ruled for Straw and found Shelter owed him $100,000 because of a layperson’s reasonable interpretation that an offset would come from total damages rather than from the policy limits. Id.Shelter appealed and the Southern District found for Shelter, largely due to the precedent it had set in Lynch. Id. at 596. The court compared the two policies and found “only insignificant variations in language.” Id.
While the court was “inclined to agree” with Straw that an average person would likely believe he or she had $100,000 in UIM coverage, the policy language in this case was nearly identical to that in Lynch. Id. Therefore, the reasoning of Lynch applied with the “subject to” clause in the limits of liability provision clearly indicating limits on recovery and the provision further specifying the policy limits would be reduced by other amounts the insured received for damages. Id. at 597. Noting the permissibility of set-off provisions that deduct from coverage limits as long as appropriate language is used, the court found the Shelter policy limited UIM damages to $100,000 minus the $100,000 previously recovered from Farmers and consequently Shelter did not owe Straw for his uncompensated damages. Id. at 596-98.
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