Underinsured Set-off StatusBlake Heath2013-04-01T20:45:47+00:00
Current Issues in Underinsured and Uninsured Insurance Coverage in Missouri
Underinsured Set-off Status
|With no statutory public policy expressed, the insurer can limit the insured from stacking underinsured coverage. To do so, in order to be unambiguous, the insurer must clearly state the coverage cannot be cumulative and should specifically use the word “stack” in the prohibition. Any ambiguity will allow the insured to add the multiple underinsured policies up to the amount of uncompensated damages.As with underinsured stacking, the issue of set-offs is not simple. The set-off language from the most recent Supreme Court case and the three appellate cases is similar, yet the outcomes were different.
|Set-off Language in Long
||Set-off Language in Straw
|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 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.Straw, 334 S.W.3d at 596.
|Set-off Language in Lynch
||Set-off” Language in Ritchie
|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 that insured.Lynch, 325 S.W.3d at 534.
||A. The limit of liability shown in the Declarations for each person for Underinsured Motorist coverage is our maximum limit of liability for all damages for case, loss of services, or death arising out of “bodily injury” sustained by any one person in any one accident.B. The limit of liability shall be reduced by all sums: . . . [p]aid because of ‘bodily injury’ or by or on behalf of persons organizations who may be legally responsible.Ritchie, 307 S.W.3d at 136-37.
Without clear and unambiguous language stating a previous recovery will be set-off from policy limits, the insurer may only set-off from the total damages. Ambiguity is apt to be found in the conflicting provisions in the insuring agreement, UIM coverage, and Other insurance language.
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