Causes of Action: Uninsured motorist benefits (UM) damages

From Stamper v. Hyden, COA, Published, 2/18/2011

The Kentucky Supreme Court has stated, “UM coverage is first party coverage, which means that it is a contractual obligation directly to the insured . . . .” Coots v. Allstate Ins. Co., 853 S.W.2d 895, 898 (Ky. 1993). To recover UM benefits under an insurance contract, the insured must prove that “the offending motorist is a tortfeasor” and prove “the amount of damages caused by the offending motorist.” Id. at 899. However, as long as the insurance policy complies with the statute, “individual insurers may, by contractual definitions, provide coverages and terms and conditions in addition to those required by the statute.” Burton v. Farm Bureau Ins. Co., 116 S.W.3d 475, 478 (Ky. 2003).

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It appears that the facts of this case raise an issue of first impression in Kentucky: On a claim for UM benefits, whose point of view determines whether an accident occurred – the perspective of the insured-victim or the perspective of the uninsured motorist-tortfeasor?

Our Court has previously noted that “the legislative intent of KRS 304.20-020 is to make whole – to the extent possible – an injured party who would otherwise not receive compensation from an at-fault uninsured party.” Dyer v. Providian Auto & Home Ins. Co., 242 S.W.3d 654, 656 (Ky. App. 2007) citing Wine v. Globe American Casualty Company, 917 S.W.2d 558 (Ky. 1996). We believe the protective purpose of the statute is achieved by interpreting “accident” from the perspective of the insured-victim, and we join the majority of jurisdictions in adopting this view: e.g., Leatherby Ins. Co. v. Willoughby, 315 So. 2d 553 (Fla. App. 1975); Alabama Farm Bureau Mut. Cas. Ins. Co., Inc. v. Mitchell, 373 So. 2d 1129 (Ala. Civ. App. 1979); Keeler v. Farmers and Merchants Ins. Co., 724 S.W.2d 307 (Mo. App. 1987); Dyer v. American Family Ins. Co., 512 N.E.2d 1071 (Ill. App. Ct. 1987); General Acc. Ins. Co. of America v. Olivier, 574 A.2d 1240 (R.I. 1990); State Farm Mut. Auto. Ins. Co. v. McMillan, 925 P.2d 785 (Colo. 1996); Wendell v. State Farm Mut. Auto. Ins. Co., 974 P.2d 623 (Mont. 1999); and State Farm Mut. Ins. Co. v. Pitman, 809 A.2d 1280 (N.H. 2002). In Celina Mut. Ins. Co. v. Saylor, 35 Ohio Misc. 81, 301 N.E.2d 721 (1973), the court, noting that the insured-victim “consciously contracted” with the carrier for UM protection, explained:

The intent in the mind of the insured at the time of injury should determine whether the acts are accidental or intentional. To look through the eyes of the uninsured rather than the insured in this factual situation would require an unconscionable twisting of the obvious purpose of purchasing insurance coverage.

All reason and logic would require a construction and interpretation that intent of mind should be taken from the viewpoint of the insured. Since the insured in the instant case was clearly not acting intentionally to warn herself, since the [insured] in the instant case was the party privy to the insurance contract; since the [insured] herein is the party who paid the premium for coverage to protect herself from the risk of injury caused by an uninsured third person it is the court's belief that the provisions of the insurance policy must be construed most favorably from the insured's viewpoint.
Id. at 723.

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