Insurers limit UM coverage by their definitions of "insured"
In National American Insurance Co. v. Vallion, 2008 OK CIV APP 41 , NAICO issued an insurance policy to a school district which covered vehicles owned by the school district. Vallion was employed by the school and was a passenger in a covered vehicle which was hit by an underinsured driver. Vallion had a car which was covered by insurance.
The NAICO policy excluded from the definition of an "insured" for uninsured motorist coverage purposes, those who own their own vehicles which are covered by statutorily mandated insurance. Thus, NAICO argued that even though Vallion was injured while riding in a district-owned vehicle, the policy language excludes UM coverage for him because he owns a personal motor vehicle and is insured under an insurance policy in compliance with the Oklahoma Financial Responsibility Act, 47 O.S. 2001 §7-101 et seq. (the Act).
Under Oklahoma law, the purpose of UM is "to protect the insured from the effects of personal injury from an accident with another motorist who either carries no insurance or has inadequate coverage." Burch v. Allstate Ins. Co., 1998 OK 129, ¶13, 977 P.2d 1057, 1063. Similar contractual exclusions were upheld in Shepard v. Farmers Ins. Co., 1983 OK 103, 678 P.2d 250, and Graham v. Travelers Ins. Co., 2002 OK 95, 61 P.3d 225.
The appellate court affirmed the trial court's ruling that Vallion was not covered under the policy.
