
Question from an IIABNY member: If you are in an employer’s
vehicle, you are the passenger, there is an accident, and the other driver and
your employer carry only the minimum liability limits required by the state, are you able to collect on your
personal auto policy Supplementary Uninsured/Underinsured Motorist (SUM) coverage for things not covered by your Workers' Compensation benefits?
Answer: Interesting question. ISO endorsement PP 04
09 12 00, Supplementary
Uninsured/Underinsured Motorists Endorsement – New York, states in relevant
part:
Insured. The
unqualified term "insured" means:
(1) You, as
the named insured and, while residents of the same household, your spouse and
the relatives of either you or your spouse;
(2) Any
other person while occupying:
(i) A motor
vehicle insured for SUM under this policy: or
(ii) Any
other motor vehicle while being operated by you or your spouse; and
(3) Any
person, with respect to damages such person is entitled to recover, because of
bodily injury to which this coverage applies sustained by an insured under
Paragraph (1) or (2) above.
In your scenario, the injured person was a
passenger in the employer’s vehicle. Let’s assume that the injured person falls
within the above definition of “insured” in the SUM endorsement. The
endorsement goes on to define “uninsured motor vehicle” in part as:
The term
"uninsured motor vehicle" means a motor vehicle that, through its
ownership, maintenance or use, results in bodily injury to an insured, and for
which: ...
(3) There is
a bodily injury liability insurance coverage or bond applicable to such motor
vehicle at the time of the accident, but:
(i) The
amount of such insurance coverage or bond is less than the third-party bodily
injury liability limit of this policy; or
(ii) The
amount of such insurance coverage or bond has been reduced, by payments to
other persons injured in the accident, to an amount less than the third-party
bodily injury liability limit of this policy; or
(iii) The
insurer writing such insurance coverage or bond denies coverage, or such
insurer is or becomes insolvent.
In the incident you described, the other
driver’s vehicle appears to fall within this definition. The Damages for Bodily
Injury Caused by Uninsured Motor Vehicles provision states:
We will pay
all sums that the insured or the insured's legal representative shall be
legally entitled to recover as damages from the owner or operator of an
uninsured motor vehicle because of bodily injury sustained by the insured,
caused by an accident arising out of such uninsured motor vehicle's ownership,
maintenance or use, subject to the Exclusions, Conditions, Limits and other
provisions of this SUM endorsement.
There are only three exclusions –
settlement without the insurer’s consent, autos owned by the insured that do
not carry SUM coverage, and non-economic loss. Therefore, it appears that a
person injured in his employer’s vehicle is eligible for SUM benefits under his
personal auto policy. Since both the employer’s UM/UIM coverage and the
employee’s SUM coverage are involved, we have to refer to the Priority of
Coverage provision determine who pays what:
If an
insured is entitled to uninsured motorists coverage or supplementary
uninsured/underinsured motorists coverage under more than one policy, the
maximum amount such insured may recover shall not exceed the highest limit of
such coverage for any one vehicle under any one policy, and the following order
of priority shall apply:
(a) A policy
covering a motor vehicle occupied by the injured person at the time of the
accident;
(b) A policy
covering a motor vehicle not involved in the accident under which the injured
person is a named insured; and
(c) A policy
covering a motor vehicle not involved in the accident under which the injured
person is an insured other than a named insured.
Coverage
available under a lower priority policy applies only to the extent that it
exceeds the coverage of a higher priority policy.
Suppose there were three people in the
employer’s car, each was injured, and a court awards them a total of $375,000
($125,000 each.) The other driver carried minimum limits, the employer carried
minimum UM/UIM limits and no SUM coverage, and
the employee had personal SUM coverage with limits of $250/$500. Here’s
how the math works out:
- Driver #2’s liability insurance pays
$50,000 total for the three people injured in the employer’s car
- Employer’s UIM coverage pays $50,000 total
for the three people (higher priority coverage)
- Employee’s SUM coverage pays $25,00 (lower
priority coverage)
Bear in mind that the Non-Duplication
provision states that SUM coverage will not duplicate Workers’ Comp benefits
and no-fault benefits, so these numbers may have to be adjusted to reflect
that. However, this is basically how it works.
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