"Owned" vehicle exclusion and underinsured motorist coverage, Missouri law

In Manner v. Schiermeier, Manner was severely injured when the motorcycle he was driving was hit by a car driven by Schiermeier.  Manner had $1.5 Million in damages.  Manner sued Schiermeier for negligence, and Schiermeier’s insurer paid its $100,000 liability limit.  Manner then sued his insurance companies for underinsured motorist coverage.  The trial court granted the insurers summary judgment on the grounds that the "owned vehicle exclusion" precluded coverage.  The Missouri Supreme Court reversed.

Manner had agreed to buy the motorcycle from his uncle, but Manner was still paying for it, and the uncle still had the title when the accident occurred.  Simply because Manner had an insurable interest in the motorcycle did not make him the owner of the motorcycle.  Because the insurers did not define "owner" to include anyone with an insurable interest in the vehicle, the insurers had not met their burden of proof on this issue.

The policies defined an "underinsured motorist" as one who's liability limits are "less than the limits of liability of this Underinsured Motorists coverage."  The insurers argued that since the liability limits of Schiermeier were the same as the UM limits, the tortfeasor, Schiermeier was not an underinsured motorist.   The Supreme Court rejected this argument as well, citing Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129 (Mo. banc 2007).

If the UM policies permits coverage from multiple policies to be stacked, then the coverage provided by the policies is their stacked amount, not the amount each would provide if considered separately, and it is the stacked amount that must be compared against the insurance coverage of the tortfeasor.  When insurance policies permit stacking, the coverage contracted for is the total of the policy limits when stacked.  In this case, the policies allowed stacking because of the excess clause in the UIM coverage. 

Finally, the insurers argued they should get a credit for the $100,000 paid by the tortfeasor.  The Court rejected this claim, stating:  

The policy promises to pay the listed limits of liability, not simply the listed limits of liability reduced by the amount paid by the tortfeasor. Insurers’ construction of the policy would permit the policy to promise to pay the full limits of liability and yet these limits never would be paid as the amount of liability promised always would be reduced by the recovery from the other driver.

The court also rejected the insurers' claim that the amount Manner received from a settlement of with the helmet manufacturer should also be deducted. 

 

 

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