In a previous post, we discussed Uninsured/Underinsured Motorist (“UM”) coverage provisions in auto insurance policies. In short, UM coverage is intended to protect the policyholder in cases of injury or loss inflicted by another driver who has inadequate insurance or no insurance at all. UM coverage is not without limitation; however, as most policies apply the coverage only to the named policyholder himself and in cases when the loss or injury occurs through use of the vehicle covered by the policy. In Cadwallader v. Allstate Ins. Co., the court stated that an insurance policy is “a contract between the parties and should be construed using the general rules of interpretation of contracts set forth in the Civil Code.” Thus, the policy language will control the details of UM coverage, so long as any limitations in the provision do not violate public policy.
The general rules of contract interpretation were applied by Louisiana’s Second Circuit Court of Appeal in the case of Kottenbrook v. Shelter Mutual Insurance Co. On June 29, 2009, Jack Kottenbrook, an Ouachita Parish sheriff’s deputy, was involved in a car accident while riding as a passenger in a police cruiser. He suffered serious injuries in the crash and sought damages before eventually settling with the at-fault driver and the driver’s insurer. Kottenbrook then filed a lawsuit against Shelter Mutual Insurance Company, alleging he was covered under the underinsured motorist provision in a policy for which he was identified as an “additional listed insured.” This policy was issued to Jack Armstrong, Inc., a corporation, and specifically covered a Ford Mustang owned by the corporation. Kottenbrook was, however, not driving this Ford Mustang when the accident occured, so the court must look to the direct policy language to determine if he was occupying a “covered vehicle” in which the policy would provide him coverage.
Shelter disputed that the policy’s UM coverage extended to Kottenbrook, given that he was not “occupying” the “covered vehicle” at the time of his injuries. The Second Circuit declared that “the coverage extended to Kottenbrook is defined and limited under the policy.” A reading of the definitions contained within the policy led the court to find that UM coverage “was limited to Kottenbrook’s use of the [Mustang,]” not any other vehicle such as the police cruiser. The court found nothing impermissible about this limitation from a public policy perspective, and affirmed the trial court’s judgment for Shelter. It is important to read and understand the coverage of a UM insurance policy because they are often equipped with a variety of limitations. As in Caldwater v. Allstate Insurance Co., insurance policies are contracts that must be looked at with a careful set of eyes to truly understand how every provision hidden in the contract applies to unfortunate circumstances like Mr. Kottenbrook.
As we have seen in other cases involving insurance disputes, Louisiana courts are inclined to enforce insurance policies–including all lawful limitations to coverage–as written. Policyholders are therefore well advised to read their policies carefully so as to understand exactly the nature of the coverage offered in exchange for premiums paid. It is important to consult an experience attorney that knows his way around the complex language of insurance policies to make sure you get the compensation that you deserve.