COVERAGE
Persons Covered
Since the uninsured motorist legislation and regulations do not specifically define an insured who is entitled to coverage under the uninsured motorist provisions of the policy, public policy mandates that an insurer provide uninsured motorist benefits to any person defined as an insured under the liability portion of the policy. Middlesex Ins. Co. v. Quinn, 225 Conn. 257 (1993).
The typical uninsured motorist policy provides coverage for the following classes of persons:
- the named insured and while residents of the same household as the named insured, the relatives and spouse of the named insured;
- anyone occupying a vehicle insured by the liability coverage; and
- any other person entitled to recover due to bodily injuries sustained by a person insured under (1) or (2) above.
Coverage for the named insured, resident spouse and relatives
The named insured is provided with the most comprehensive coverage. The spouse and relatives of the named insured are covered only if they reside in the same household as the named insured.
Resident relatives of a named insured owning their own vehicle, who are injured by an uninsured motorist while occupying their own vehicle, may be excluded from uninsured motorist coverage under the named insured's policy. Middlesex Ins. Co. v. Castellano, 225 Conn. 339 (1993); Middlesex Ins. Co. v. Quinn, 225 Conn. 257 (1993); Middlesex Ins. Co. v. Rady, 34 Conn. App. 679 (1994); Stewart v. Middlesex Ins. Co., 38 Conn. App. 194 (1995).
Residency within the same household depends upon the particular factual circumstances involved. Two elements are primary in determining this: whether the facts sufficiently establish (1) the claimant had a close family-type relationship with the inhabitants of the household; and (2) the claimant actually lived in the household. Middlesex Mutual Assurance Co. v. Walsh, 218 Conn. 681 (1991); Griffith v. Security Ins. Co., 167 Conn. 450 (1975); D'Addio v. Conn. Ins. Guaranty Association, 30 Conn. App. 729 (1993); Remington v. Aetna Cas. & Surety Co., 240 Conn. 309 (1997).
Residency depends upon objective factors relevant to those two elements.
In Remington v. Aetna Casualty & Surety Co., 35 Conn. App. 581 (1994) the court decided that, in the context of uninsured motorist coverage, the stepparent-stepchild relationship, which is based on affinity, does not terminate automatically when the marriage that created it is terminated by the death of the biological parent. Where the stepparent continues in the role of parent to the stepchild after the death of the biological parent, then the relationship of affinity continues.
Coverage for employees of corporate named insureds.
Depending upon the facts and circumstances of the particular case, the insertion of "family member" language in a business auto policy insuring a corporate named insured may extend coverage to natural persons. Ceci v. National Indemnity Co., 225 Conn. 165 (1993); Agosto v. Aetna Cas. & Surety Co., 239 Conn. 549 (1996); Agosto v. Aetna Cas. & Surety Co., 239 Conn. 549 (1996). Hansen v. Ohio Cas. Ins. Co., 239 Conn. 537 (1996).
Such a determination is fact-intensive and depends upon the nature and size of the business; the relationship between the officers and employees; whether the listed drivers were related to the owner, etc. Ceci, supra.
Coverage for members of voluntary associations.
A policy of automobile insurance issued to a voluntary association indemnifies the members of a voluntary association under the liability portion of the policy and therefore also insures them as named insureds for uninsured motorist coverage. Hartford Accident and Indemnity Co. v. Sena, 42 Conn. Sup. 336 (1993).
Coverage for persons occupying an insured vehicle.
Coverage for this class of persons is required by regulation. Regs. Conn. State Agency Sec. 38a-334-6(a).
Occupants of a motor vehicle are not insured under the policy for liability coverage, and, without the regulation, would not be entitled to uninsured motorist coverage under the owner's policy of insurance. See Conn. Gen. Stat. Sec. 38a-335(d); Regs. Conn. State Agency Sec. 38a-334-5(d).
The term "occupying" is generally defined as "in or upon or entering into or alighting from" the vehicle. Testone v. Allstate Ins. Co., 165 Conn. 126 (1973). Almeida v. Liberty Mutual Ins., 234 Conn. 817 (1995).
For a person to be covered under this clause of the policy, they must be in actual physical contact with the insured vehicle at the time of the injury. Testone, supra, but see Wilson v. Security Ins. Co., 213 Conn. 532, where the claimant was not in physical contact with the insured vehicle, but the Supreme Court allowed recovery.
Furthermore, the occupation of the insured vehicle must be with the permission of the named insured. A person occupying the insured vehicle without the permission of the insured is not covered under this clause. Employees Commercial Union Ins. Co. v. White, 4 CLT, No. 37, p. 11 (1978).
Coverage for persons who suffer consequential damages as a result of bodily injuries sustained to an insured.
This clause allows a person who incurs medical expenses on behalf of an insured, or has a cause of action for loss of consortium, to assert a claim under the uninsured motorist provisions of the policy. Smith v. Amica Mutual Ins. Co., 7 Conn. L. Rptr. No. 19, 539 (1992).
A claim for loss of consortium (being derivative) falls within the per-person limit of a split limit policy and does not spring the higher per-occurrence limit of that policy. Izzo v. Colonial Penn Ins. Co. 203 Conn. 305 (1987). DeMarinis v. USAA Casualty Ins. Co. Inc., 44 Conn. App. 172 (1997).
This claim would also seem to allow an insured to make a claim for bystander emotional distress under Clohessy v. Bachelor, 237 Conn. 31 (1996).
Excess or Umbrella Coverage
Neither excess liability policies nor excess indemnity policies are automobile liability policies within the meaning of C.G.S. '38a-336 and, therefore, are not required to provide uninsured motorist coverage. Mass v. United States Fidelity & Guaranty Co., 222 Conn. 631 (1992); Cohn v. Pacific Employers Ins. Co., 213 Conn. 540 (1990).
Some excess policies specifically provide uninsured motorist coverage in limited amounts. This fact does not convert it into an automobile liability policy. Therefore, excess policies providing limited uninsured motorist coverage need not provide uninsured motorist coverage equal to the limit of the excess coverage. Curran v. Aetna Casualty & Surety Co., 222 Conn. 657 (1992).
Since the excess policy is not an automobile liability policy within the meaning of C.G.S. '38a-336, the doctrine of stacking does not apply. Curran v. Aetna Casualty & Surety Co., supra.
Who Decides the Issue of Coverage?
If the policy provides for arbitration, then by statute it must include a provision for final determination of insurance coverage in the arbitration proceeding. C.G.S. '381-336(c).
When the policy provides for arbitration, the insurer cannot limit the arbitrator's power to decide the coverage issue; that power is statutorily mandated. Oliva v. Aetna Casualty and Surety Co., 181 Conn. 37 (1980).
Coverage issues must be arbitrated even if the coverage dispute involves an unsettled or difficult question of law. Lane v. Aetna Casualty and Surety Co., 203 Conn. 258 (1987).
The arbitability of a dispute is a threshold legal question for the Court. The identifying characteristic of a coverage issue is the need to interpret the terms of the policy to determine the scope of its coverage. Wynn v. Metropolitan Property and Casualty Ins. Co., 30 Conn. App. 803 (1993); Aff'd. 228 Conn. 436 (1994).
A coverage issue is one that is governed wholly by the policy language or involves the interpretation of both statutory and policy language or otherwise implicates the scope of coverage afforded by the terms of the policy. Wynn, supra.
A claimant with an uninsured motorist claim must prove the following to compel arbitration:
- At the time of the accident the policy was in effect;
- The policy contained an arbitration clause;
- The claimant was in the class of persons defined as insureds in the policy;
- The insurer has not paid the claimant's uninsured motorist claim;
- The claimant's injuries were caused in such a manner to give rise to an uninsured motorist claim under the policy and applicable statutes;
- There is either no other insurance or inadequate coverage to indemnify the claimant for his injuries. Gaudet v. Safeco Inc. Co., 219 Conn. 391 (1991).
To compel arbitration, the claimant need not prove that he would be entitled to the coverage sought. Gaudet, supra.
Scope of Review of Arbitration Awards
The scope of judicial review of an arbitration award arising from a voluntary submission is limited by the terms of the arbitration agreement and by the provisions of C.G.S. '52-418. American Universal Insurance Co. v. DelGreco, 205 Conn. 178 (1987).
In such cases, the Court merely examines the submission to arbitration and the award to determine whether the award conforms to the submission; the Court will review neither the evidence nor the award for errors of fact or law. American Universal Insurance Co., supra.
Scope of review of compulsory arbitration awards
Scope of review of compulsory coverage issues: Where judicial review of compulsory arbitration proceedings is undertaken under General Statutes '52-418, the reviewing court must conduct a de novo review of the interpretation and application of the law by the arbitrators to the coverage issue. De novo review is an independent review by the Court to determine if the arbitration panel's interpretation or conclusions of law are legally and logically correct. Such review is limited to the arbitration panel's interpretation and application of the law relating to coverage. American Universal v. DelGreco, supra.
Scope of review of factual findings with respect to compulsory coverage issues: The appropriate standard of review for such factual findings is the substantial evidence test.
The substantial evidence test compels a reviewing court to determine whether the record contains substantial evidence to support the arbitration panel's factual findings and whether the panel has drawn reasonable conclusions from those facts. Chmielewski v. Aetna Casualty and Surety Co., 218 Conn. 646 (1991).
In order to preserve a challenge to the panel's factual findings and to ensure that the reviewing court is able to conduct an effective review, the statute requires a record of the proceedings to be preserved and made available to the Court. Chmielewski, supra.
Scope of review of voluntary legal and factual issues.
Many policies provide that the only issues to be arbitrated are: (1) The insured's right to recover damages from the owner or operator of the uninsured motor vehicle, and (2) the amount of such damages.
Insurers who contractually provide for the arbitration of these issues do so voluntarily and without statutory compulsion. Bodnar v. USAA, 222 Conn. 480 (1991).
Judicial review of the arbitration decision on these issues is limited to determining whether the award conforms to the submission. Bodnar v. USAA, supra.
Election of Lower Limits
Since July 1, 1984, C.G.S. '38a-336 has required that every auto policy issued or renewed after that date have uninsured motorist coverage equal to the liability coverage of the policy, unless the insured requests in writing a lesser amount.
The statute does not require the insurer to explain the purpose of the coverage, the advantages or disadvantages of electing a particular level of coverage.
All that is required for an effective election of lower limits is a writing signed by all named insureds. Nationwide Mutual Ins. Co. v. Pasion, 219 Conn. 764 (1992).
However, when the co-owner, who signed the Reduction in Coverage form, was the party subsequently injured, such reduction was affected as to that co-owner. Colonial Penn Insurance Co. v. Bryant, 45 Conn. App. 558 (1997); Aff'd in part 245 Conn. 710 (1998).
Public Act 93-297
The election of lower limits has been transformed by Public Act 93-297 into a waiver.
Waiver is a voluntary relinquishment of a known right. It requires the party relinquishing the right to be made aware of it and to decide knowingly and intelligently to forego it. Harlach v. Metropolitan Property and Liability Ins. Co., 221 Conn. 185 (1992).
The Act continues the requirement that the request for lower uninsured motorist limits be in writing.
The request is ineffective unless any named insured has signed an "informed consent form" containing:
"When you sign this form you are choosing a reduced premium, but you are also choosing not to purchase certain valuable coverage which protects you and your family. If you are uncertain about how this decision will affect you, you should get advice from your insurance agent or another qualified advisor."
- an explanation of UM coverage which has been approved by the Insurance Commissioner.
- the uninsured motorist coverage options available.
- the premium costs for each option.
- a heading in 12-point type which states as follows:
- The amendment authorizing a reduction of coverage by a writing signed by any named insured is not a clarification of the prior legislation and does not apply retroactively. Colonial Penn Insurance Co. v. Bryant, 45 Conn. App. 558 (1997); Aff'd. in part, 245 Conn. 710 (1998); General Accident Insurance Co. v. Powers, Bolles, Houlihan & Hartline, Inc., 50 Conn. App. 701 (1998), Aff'd., 251 Conn. 56 (1999).
Coverage for Punitive or Statutory Damages
A claimant may not recover common law punitive damages, that is, attorneys fees and non-taxable costs, from an insurer under the uninsured motorist provisions of the policy, Bodnar v. USAA, 222 Conn. 480 (1992).
Statutory double or treble damages set forth in C.G.S. '14-295 are not recoverable under an uninsured motorist endorsement. Caulfield v. Amica Mutual Ins. Co., 31 Conn. App. 781 (1993).
Coverage for Accidents Caused by Force and Run Vehicles
Initially, UM coverage extended only to accidents involving physical contact between the insured or with a vehicle occupied by the insured. Rosnick v. Aetna Casualty and Surety Co., 172 Conn. 416 (1977). This requirement prohibited an uninsured motorist claim that did not involve physical contact, that is, a force and run claim.
Physical contact has now been held to be inconsistent with the statutorily mandated uninsured motorist coverage. Streitweiser v. Middlesex Mutual Assurance Co., 219 Conn. 371 (1991).
A claimant making a force and run uninsured motorist claim is not required to present independent corroborative evidence of the facts of the occurrence. Keystone Ins. Co. v. Raffile, 225 Conn. 223 (1993).
In a case where the plaintiff pedestrian was struck by a vehicle whose driver stopped after the accident, but left the scene after the pedestrian affirmatively dismissed the driver, the court held that the plaintiff was not entitled to maintain an uninsured motorist claim under policy language permitted a claim for an accident involving a "hit and run vehicle whose operator or owner cannot be identified." Sylvestre v. United Service Auto Association, 42 Conn. App. 219 (1996).
Limits of Coverage
The statute previously required an insurer to provide an insured with uninsured motorist coverage with limits equal to, but not exceeding, the bodily injury coverage limit, unless all named insureds request, in writing, a lesser amount.
Limits of coverage after Public Act 93-197
The Act requires insurers to offer uninsured motorist limits in an amount that is twice the limits of the insured's bodily injury coverage.
UM coverage must still be at least equal to the policy's bodily injury coverage unless the named insured requests, in writing, a lesser amount.
Pleading issues of policy limitation
An insurer must raise issues of policy limitation by special defense, even when they are undisputed. Bennett v. Automobile Insurance Co. of Hartford, 230 Conn. 795 (1994).
MULTIPLE COVERAGES
Stacking in General
A claimant may be covered under more than one uninsured motorist provision. It is well settled that an insured may stack or pyramid uninsured motorist coverages to obtain more complete indemnification for their injuries, Allstate Ins. Co. v. Ferrante, 201 Conn. 478 (1986), and subject to certain limitations to determine the availability of underinsured motorist benefits. Covenant Ins. Co. v. Coon, 220 Conn. 30 (1991).
Inter-policy stacking is the aggregation of uninsured motorist coverages of separate and distinct policies insuring separate motor vehicles. Cohn v. Aetna Ins. Co., 213 Conn. 525 (1990).
Intra-policy stacking is the aggregation of uninsured/underinsured motorist coverages of multiple vehicles insured under one policy where each vehicle is separately described and separate premiums are charged. Cohn, supra.
Stacking derives from a presumption that when the insured purchases multiple coverages they intend to purchase additional protection. Cohn, supra.
The reasonable expectations doctrine applies only in the context of personal auto policies. Chmielewski v. Aetna Casualty and Surety Co., 218 Conn. 646 (1991).
Inter-policy Stacking and Underinsured Motorist Cases
In determining whether a motor vehicle is underinsured, the aggregate of the liability limits of all the tortfeasor's policies must be compared to the underinsured motorist coverage limit of each policy against which claim is being made. Covenant Ins. Co. v. Coon, 220 Conn. 30 (1991).
If the total of the liability limit is less than the underinsured motorist limit of each individual policy, the individual UM policies may then be stacked. Covenant Ins. Co. v. Coon, supra.
Limitations on Stacking
Policy Language
The various policy provisions that have attempted to limit an insured's ability to stack under multiple policies or the same policy have been held to be invalid since such provisions are not authorized by statute or regulation.
Other insurance clauses: Safeco Insurance Co. v. Vetre, 174 Conn. 329 (1978); Pecker v. Aetna Casualty and Surety Co., 171 Conn. 443 (1976).
Limitation clauses: Nationwide Ins. Co. v. Gode, 187 Conn. 386 (1982).
Single Premiums
Insurers are now charging a single premium for UM coverage for multiple vehicles insured under one policy, rather than charging a separate premium for each vehicle. This has been held to be effective in prohibiting intra-policy stacking when the single premium is actuarially appropriate and the policy language expressly prohibits stacking. Kent v. Middlesex Mutual Assurance Co., 226 Conn. 427 (1993).
Fleet Stacking
The concept of stacking as an objectively reasonable expectation of the parties does not extend to "fleet insurance contracts." Chmielewski v. Aetna Casualty and Surety Co., 218 Conn. 646 (1991).
Fleet insurance contracts are defined as a "fleet" or "garage" policy, or any insurance policy covering a number of vehicles owned by a business, a governmental entity, or an institution. Chmielewski, supra.
Stacking After Public Act 93-297
The Public Act legislatively overturns case law and eliminates both intra-policy and inter-policy stacking.
The occupant of a non-owned vehicle is entitled to pyramid coverages. When the claimant is occupying a non-owned vehicle such claimant is entitled to coverage under multiple policies, as long as the policy limit of each policy under which the claimant is making a claim exceeds the liability limit of the tortfeasor's liability policy. If an insured is covered under multiple policies, the act limits the insured to recovering up to the highest uninsured motorist limit of any policy under which the insured is covered and then mandates the order of contribution among the multiple insurers up to the highest uninsured motorist limit of any one policy.
Multiple CoveragesCWho Pays?
One of the most significant and difficult issues involved in a multiple policy UM case is the order of payment among the various insurers.
Insurers have attempted to resolve the issue by including "other insurance" clauses in their policies. See P. Morello "The Problem of Multiple Uninsured Motorist Coverage: Who Pays?" 62 Conn. B. J. 358 (1998).
While "other insurance" clauses cannot be used to prohibit an insured from stacking, they are valid to determine the order of payment among multiple uninsured motorist insurers. Aetna Casualty and Surety Co. v. CNA Ins. Co., 221 Conn. 779 (1992); O'Brien v. USF&G Co., 223 Conn. 837 (1996).
Determining the proper order of priority among multiple insurers is difficult because the "other insurance" clauses used by the various carriers often are not uniform, and because no automatic rules apply.
Determining who pays requires a case-by-case examination of the factual issues, the occupancy by the claimant, and the ownerships of the vehicles involved. A comparison between the other insurance clauses must be made and if they can be reconciled they should be given effect.
Priorities of coverage after Public Act 93-297 - The Act to some degree mandates the order of payment among multiple UM insurers.
Recovery for an insured covered under multiple policies is limited by the Act up to the highest uninsured motorist limit of any policy under which the insured is covered. The Act then mandates the order of contribution among the multiple insurers up to the highest UM limit of any one policy. It provides the following rules:
- The claimant is an occupant of an owned vehicle, the UM coverage applicable to that owned vehicle is the sole UM coverage available;
- The claimant is an occupant of a non-owned vehicle
- The UM coverage of the occupied vehicle is primary;
- Any UM coverage for which the claimant is a named insured is secondary;
- Any other policies under which the claimant is an insured, for example, as a resident relative, are excess;
- In the event there are multiple excess policies the amount paid by the excess insurers is pro-rated.
REDUCTIONS OF COVERAGE
In General
An insurer may reduce its liability only as permitted by Regs. Conn. State Agency Sec. 38a-334-6(d). Lowrey v. Valley Forge Ins. Co., 224 Conn. 152 (1992).
The policy must contain language incorporating the reductions permitted by the regulation. If the policy fails to take advantage of the reductions, the insurer should be barred from reducing its coverage. Chmielewski v. Aetna Casualty and Surety Co., 218 Conn. 646 (1991).
Reduction for Damages Paid by or on Behalf of Any Person Responsible for the Injury - Regs. Conn. State Agency Sec. 38a-334-6(d)(1)
Policy language allowing the insurer to reduce its coverage by "all sums paid because of the bodily injury by or on behalf of persons or organizations who may be legally responsible" restricts the insurer to deducting payments only to the claimant, not payments made to other persons. Buell v. American Universal Ins. Co., 224 Conn. 766 (1993).
The question of whether the statute or regulation would permit an insurer to take credit for payments made to other claimants has now been resolved in Allstate Ins. Co. v. Lenda, 34 Conn. App. 444 (1994).
The policy at issue in Lenda provided as follows: The limits of this coverage will be reduced by: (1) All amounts paid by the owner or operator of the uninsured auto or anyone else responsible..." The court found that under the terms of this policy, Allstate was entitled to reduce the amount of UM benefits payable to the claimant by all amounts paid by the tortfeasor to all injured parties, including amounts paid for personal injury and property damage. The court further found that the regulation authorized this type of policy provision.
The underinsured motorist carrier may also reduce its liability by taking credit for a tortfeasor's personal payment to the insured. Lumbermen's Mutual Casualty Co. v. Huntley, 223 Conn. 22 (1992).
The regulation allows an insurer to deduct a settlement payment from a party who may not be construed as a tortfeasor from the damages owed to its insured. Buell v. American Universal Ins. Co., supra.
Payments made under a dram shop policy may not be deducted. American Universal Ins. Co. v. DelGreco, 205 Conn. 178 (1987).
Reduction not applicable to underinsured motorist conversation coverage.
Underinsured motorist conversation coverage is not subject to a reduction for amounts paid by or on behalf of the tortfeasor. Public Act 93-297 Sec. 2(c).
The total amount of recovery by the claimant may exceed the underinsured motorist conversion coverage limit.
Reduction for Workers' Compensation
The policy may provide for the reduction of limits to the extent that damages have been paid or are payable under workmen's compensation or disability benefits law. See Rydingsword v. Liberty Mutual Ins. Co., 224 Conn. 8 (1992); Wilson v. Security Ins. Co. 213 Conn. 532 (1990).
The deduction includes workers' compensation benefits already paid, as well as those payable to the claimant. Rydingsword v. Liberty Mutual Ins. Co., supra.
C.G.S. Sec. 31-293a which allows employers who have made Workers' Compensation payments to employees injured by a third party to bring suit to recover those payments from the third party or to intervene in the employee=s action against such third party, does not allow an employer to make such a claim against any recovery that the employee may be entitled to under the employee=s own uninsured motorist provisions of his or her automobile insurance policy. Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375 (1997).
Reduction for Damages Paid or Payable Under Disability Benefit Law
The policy may provide for the reduction of limits by an amount equal to the sum of Social Security Disability benefits paid or payable to the insured. Vitti v. Allstate Insurance Co., 245 Conn. 169 (1998).
Reduction for Damages Paid Under the Policy in Settlement of a Liability Claim
The policy may provide for the reduction of limits to the extent that damages have been paid under the policy in settlement of a liability claim. Regs. Conn. State Agency Sec. 38a-334-6(d).
The Regulation does not address whether the reduction extends to the total amounts paid to all claimants or only the amount paid to each individual claimant. American Motorist Ins. Co. v. Gould, 213 Conn. 625 (1990).
Policy language that reduces UM limits by payments made on behalf of the tortfeasor, including "all sums" paid under the liability portion of the policy refers to payments made to all liability claimants. American Motorist Ins. Co. v. Gould, supra.
Reduction for Direct Indemnity for Medical Expense and for Basic Reparations Benefits
The Regulation does not allow the claimant to deduct attorneys fees from the reimbursement for reparations benefits. Dugas v. Lumbermens Mutual Casualty Co., 217 Conn. 631 (1991).
An insurer that pays its insured no-fault benefits is entitled to reduce the damages that the insured receives under the uninsured motorist coverage by the full amount of basic reparations benefits paid to the insured. Dugas, supra.
Basic reparations benefits includes both basic and added reparations benefits. Shelby Mutual Ins. Co. v. Della Ghelfa, 200 Conn. 630 (1986).
The statutory provision relating to the State's no-fault motor vehicle insurance scheme were repealed by Public Act 93-297 effective Janury 1, 1994.
Collateral Source Reduction
The uninsured motorist statute and regulations do not expressly provide for collateral sources to be deducted from uninsured motorist coverage. Smith v. Safeco Ins. Co. of America, 225 Conn. 566 (1993).
The statutory language of C.G.S. '52-225a does not extend to reduce uninsured motorist coverage.
Although the collateral source statute is not an authorized reduction of uninsured motorist coverage, it applies to reduce the amount of the claimant's recoverable damages. Smith, supra.
"A claimant is entitled to the full amount of underinsured motorist coverage if, after the claimant's recovery from the tortfeasor has been reduced by collateral source payments, the claimant's uncompensated damages exceed the amount of the insurance coverage." Smith, supra.
"A claimant's recourse to underinsured motorist coverage is limited in amount to less than his or her full coverage if the amount of the award against the tortfeasor for personal and economic damages, reduced in accordance with '52-225a, results in damages that are less than the full amount of underinsured motorist coverage." Smith, supra.
SELECTED ISSUES
Workers' Compensation as a Bar
Note: It is hard to imagine how the court came to this conclusion due to the fact that Section 29 of Public Act 93-297 expressly states that the provisions of this section have only prospective effect.
Prior to the enactment of Public Act 93-297, an employee who had received or was eligible to receive Workers' Compensation benefits for injuries arising from an automobile accident while operating his or her employer's motor vehicle during the course of employment was barred by the exclusivity provisions of C.G.S. '31-284(a) from recovering uninsured motorist benefits from a self-insured employer, CNA Insurance Co. v. Colman, 222 Conn. 769 (1992) or from the employer's insurer. Bouley v. Norwich, 222 Conn. 744 (1992).
Public Act 93-297 amended C.G.S. '31-284(a) to legislatively overrule Bouley and Colman by removing an uninsured motorist claim from the operation of the Workers' Compensation statute's exclusive remedy provisions.
Public Act 93-297 was intended to be clarified in legislation and, therefore, an employee was not barred from recovering uninsured motorist benefits from his or her employer's insurer for a motor vehicle accident that occurred prior to the effective date of the public act. Reliance v. American Casualty Co. of Redding, PA, 238 Conn. 285 (1996).
In Reliance Insurance Co. v. American Casualty Insurance Co., 238 Conn. 285 (1996), the personal UIM carrier of an injured employee commenced an action for reimbursement of sums that it had paid for UM benefits against the automobile liability carrier of the employer. The supreme court held that Public Act 93-297, which amended C.G.S. '31-284(a) was retroactive.
Trial De Novo
A provision in an insurance contract that allows a party to demand a trial de novo when an arbitration award exceeds the state statutory minimum coverage for bodily injury coverage but makes binding any award less than that amount unfairly favors the insurer and is unenforceable. Mendes v. Automobile Insurance Co. of Hartford, 212 Conn. 652 (1989).
General Rules for Application of Statutes of Limitations
Claims arising prior to May 20, 1993.
If the policy is subject to a two-year contractual time limitation set forth in the policy of insurance and does not fall within the savings clause of Public Act 93-77, Sect. 3, then the two-year contractual time limitation clause is valid and suit must be filed or arbitration demanded within the two-year contractual time limitation. or arbitration demanded within the two-year contractual time limitation. Wynn v. Metropolitan Property & Casualty Ins. Co., 30 Conn. App. 803 (1993); Aff'd. 228 Conn. 436 (1994); Prudential Property & Casualty Ins. Co. v. Perez-Henderson, 49 Conn. App. 653 (1998); Coelho v. ITT Hartford, 251 Conn. 106 (1999).
If the claim is subject to a two-year contractual limitation clause set forth in the policy, but falls within the savings clause of Public Act 93-77 Sec. 3, then a six-year statute of limitations applicable to contract actions generally, i.e., C.G.S. Sec. 52-576, would apply. Bayusik v. Nationwide Mutual Ins. Co., 233 Conn. 474 (1995).
If the claim is not subject to any contractual time limitations clause, then the six-year contract statute of limitations would apply. Wynn v. Metropolitan Property & Casualty Ins. Co., 30 Conn. App. 803 (1993), Aff=d. 228 Conn. 436 (1994).
Claims arising post May 20, 1993 (Copy)
Disclaimer of Coverage by Tortfeasor's Liability Carrier
Neither the statutes nor the regulations enacted thereunder provide for the maintenance of an uninsured motorist claim where the tortfeasor's insurer disclaims coverage to its insured.
Many policies extend such coverage to situations in which a bodily injury liability bond or insurance policy applies at the time of the accident, but the company writing that bond or policy denies coverage thereunder.
In AIU Insurance Co. v. Brown, 42 Conn. App. 363 (1996), the liability carrier had commenced a declaratory judgment action against its insured claiming that it had no obligation to defend or indemnify the insured in a third party claim. The uninsured motorist insurer attempted to intervene so as to forestall a possible UM claim against it. The trial court denied intervention. The appellate court reversed and held that a potential uninsured motorist insurer has a right to intervene in a declaratory judgment action commenced by the liability carrier which is attempting to disclaim coverage as to the tortfeasor. In view of the fact that the right to uninsured motorist coverage might be implicated, the uninsured motorist carrier had a meritorious right to intervene.
In Westchester Fire Insurance Co. v. Allstate Insurance Co., 236 Conn. 362 (1996), an uninsured motorist insurer that had paid UM benefits to its insured commenced an action against the tortfeasor's liability insurer which had denied coverage on the tortfeasor's vehicle on the basis that the vehicle was not listed as a covered vehicle. The UM carrier instituted a subrogation action against the liability insurer on the basis that the liability carrier had improperly denied liability benefits. In permitting a subrogation action in this context, the supreme court overruled the cases of Berlinski v. Ovellette, 164 Conn. 482; and Ciulewicz v. Doyle, 172 Conn. 177 (1976) which had previously prohibited prejudgment assignment of personal injury claims.
Legally Entitled to Recover
The contractual phrase Alegally entitled to recover requires more than simply proving that the uninsured motorist was at fault and that the claimant has sustained damages. To recover UM benefits, a claimant must prove that under the insurance contract, as well as under the applicable statutes and regulations, he or she is legally entitled to recover damages from the uninsured motorist, that is, that the other motorist was uninsured or underinsured; that the other motorist was legally liable under applicable law; and the amount of damages sustained. The second element involves a consideration of the substantive defenses available to the uninsured motorist. Williams v. State Farm Mutual Ins. Co., 229 Conn. 359 (1994).
Stays of Arbitration
An insured can proceed to arbitration under the uninsured motorist provisions of the insured's policy when one of the two alleged joint tortfeasors is insured and the other is uninsured, even though the claimant's suit against the insured tortfeasor is still pending. Buell v. American Universal Insurance Co., supra; General Accident Insurance Co. v. Wheeler, 221 Conn. 206 (1992).
Interest
C.G.S. '37-3a allows a trial court to impose prejudgment interest from the date of the award. Middlesex Mutual Assurance Co. v. Walsh, supra.
Choice of Law
In Williams v. State Farm Mutual Automobile Ins. Co., 229 Conn. 359 (1994), the supreme court applied New York substantive law in an underinsured motorist claim involving an accident that took place in New York, a plaintiff who was a Connecticut resident, and a tortfeasor who held a California license and drove a motor vehicle registered in New York.
In Reichold Chemicals Inc. v. Hartford Accident & Indemnity Co., 243 Conn. 401 (1997), the supreme court abandoned the traditional rule of Lex Loci Contractis in favor of the restate in second of conflict of law's approach to resolving choice of law questions and contract cases.
Claim or Issue Preclusion
The underinsured motorist insurer and the tortfeasor do not share the same legal right and, therefore, they are not in privity such as to invoke the doctrine of collateral estoppel. Mazziotti v.Allstate Ins. Co., 240 Conn. 799 (1997).
Subrogation Actions
UIM Insurer v. Liability Insurer: In Westchester Fire Insurance Co. v. Allstate Insurance Co., an uninsured motorist insurer who had paid benefits to its insured commenced an action against the tortfeasor's liability insurer. The liability insurer denied coverage on the tortfeasor's vehicle on the basis that this vehicle was not listed as a covered vehicle. The UM carrier instituted a subrogation action on the basis that the liability carrier had improperly denied liability benefits. The trial court struck the action noting that Connecticut did not permit subrogation of UM claims. The supreme court held that once UM benefits had been paid, the UM carrier may step into the shoes of the party it paid, i.e., the insured, and commence a subrogation action in order to recover payments that it made in order to prevent unjust enrichment of the party whose debt it paid. In permitting a subrogation action in this context, the supreme court overruled the cases of Berlinski v. Ovellette, 164 Conn. 482 (1973) and Ciulewicz v. Doyle, 172 Conn. 177 (1976).
UIM Insurer v. Tortfeasor: Although this case was decided in the context of the ability of a UM carrier to institute a subrogation action against a disclaiming liability carrier, it would appear that this principle would also allow a UM carrier, after it has paid UM benefits, to commence a subrogation action against the liable tortfeasor.
Legislatively overruled in UIM context by Public Act 97-58 '4.
SPECIAL CONSIDERATIONS IN UNDERINSURED MOTORIST CASES
Exhaustion
An insurer is obligated to pay its underinsured motorist coverage only after full exhaustion of the tortfeasor's liability insurance policies. C.G.S. '38a-336(b).
A settlement for less than the full amount of the tortfeasor's liability policy limit does not constitute the exhaustion required by the statute even if the uninsured motorist insurer is allowed a credit against its coverage for the full policy limit of the tortfeasor's coverage. Continental Insurance Co. v. Cebe-Habersky, 214 Conn. 209 (1990).
A claimant need only exhaust the per-person limit of a split limit policy before proceeding to make an underinsured motorist claim. Covenant Insurance Co. v. Coon, supra.
Since a dram shop policy is not an automobile liability policy, the claimant need not exhaust dram coverage before proceeding to make an underinsured motorist claim. American Universal Insurance Co. v. DelGreco, 205 Conn. 178 (1987).
An insured need only exhaust the liability bond or insurance policies of one tortfeasor to be eligible to pursue underinsured motorist benefits. General Accident Ins. Co. v. Wheeler, 221 Conn. 206 (192).
However, when a claimant is injured in an accident involving a vehicle operated by one party and owned by another in which the operator and owner are covered under separate insurance policies, the claimant must exhaust the liability coverages available under both the operator's and the owner's policies before making an uninsured/underinsured motorist claim. Ciarelli v. Commercial Union Ins. Co., 234 Conn. 807 (1995).
Definition of Underinsured Motor Vehicle
For an insured to make an underinsured motorist claim, the tortfeasor's motor vehicle must be underinsured as defined in the statute. Travelers Ins. Co. v. Kulla, 216 Conn. 390 (1990).
To determine whether a motor vehicle is "underinsured," the total amount of all automobile liability insurance policies on the tortfeasor's motor vehicle must be compared to the amount of underinsured motorist coverage provided by each policy against which the insured is making an underinsured motorist claim. Covenant Insurance Co. v. Coon, supra.
If the total amount of all automobile liability insurance policies on the tortfeasor's vehicle is less than the amount of underinsured motorist coverage provided by each individual underinsured motorist policy, then the underinsured motorist coverage is triggered.
If such amount is greater than the underinsured motorist coverage provided by each individual underinsured motorist policy, the underinsured motorist coverage is not accessed. Covenant Insurance Co. v. Coon, supra.
This analysis limits "inter-policy stacking" in underinsured motorist cases. Because the statute references the tortfeasor's liability limits in the plural, but the underinsured motorist provisions in the singular. Covenant Insurance Co. v. Coon, supra.
The determination of whether a motor vehicle is underinsured requires a comparison of the aggregate of liability limits and the underinsured motorist limit of each individual policy against which the insured has a claim. Covenant Insurance Co. v. Coon, supra.
Definition of underinsured motor vehicle in underinsured motorist conversion coverage.
In underinsured motorist conversion coverage, an underinsured motor vehicle is defined as "a motor vehicle with respect to which the sum of the limits of liability under all bodily injury liability bonds and insurance policies applicable at the time of the accident is less than the fair, just and reasonable damages of the covered person."
This definition makes a comparison of the liability limits of the tortfeasor's vehicle with the fair, just and reasonable damages of the covered person. If such damages are greater than the tortfeasor's liability coverage, the tortfeasor's vehicle is underinsured.
This definition is a factual question.
An all terrain vehicle is not a Amotor vehicle@ as defined by C.G.S. Sec. 14-1(47) since it is not suitable for operation on a highway, but it is a motor vehicle as defined under certain policies of insurance and may constitute an uninsured motor vehicle for such purposes. Norfolk & Dedham Fire Ins. Co. v. Wysocki, 45 Conn. Supp. 144 (1997); Aff'd. 243 Conn. 239 (1997).
Credit Against Underinsured Motorist Limits
Is each underinsured motorist insurer entitled to take a separate credit for the tortfeasor's liability coverage?
When the claimant has an underinsured motorist claim under more than one underinsured motorist policy, the underinsured motorist limits under the policies are stacked, and the amount of damages paid by the tortfeasor are subtracted from the total stacked underinsured motorist coverage, not from each individual underinsured motorist policy. Allstate Ins. Co. v. Link, 35 Conn. App. 338 (1994).
Upper Limit of Underinsured Motorist Recovery
Depending upon the policy language, the total amount of damages received by the claimant may exceed the underinsured motorist limits of the underinsured motorist policy.
In USF&G v. Pitruzzello, 35 Conn. App. 638 (1994), the court held that the insurer was not entitled to credits for payments made to other claimants by or on behalf of the tortfeasor and calculating the offset against damages owed to each of the claimants in that case. The underinsured motorist provision of the USF&G policy provided "any amounts otherwise payable as damages under this coverage shall be reduced by all sums paid because of the bodily injury by or on behalf of persons or organizations who may be legally responsible."
USF&G v. Pitruzzello held that the specific terms of the underinsured motorist policy at issue did not entitle the insurer to take a credit for payments made to other claimants in calculating the offset of damages owed to each of the claimants and collectively, therefore, the claimants could recover an amount in excess of the underinsured motorist coverage.
In Holmes v. Government Employees Ins. Co., 13 Conn. L.Rptr. No. 11, 348 (1995), the court held that the maximum benefit as limited by C.G.S. Section 38-336(b) is not reduced by payments received from the tortfeasor's liability policy for a party covered by but not claiming underinsured motorist benefits.
Upper limit of recovery under underinsured motorist conversion coverage.
The Act expressly excepts underinsured motorist conversion coverage from the operation of the above limitation on the claimant's recovery. Payments made by or on behalf of the tortfeasor do not reduce the limit of conversion coverage and, therefore, the total recovery by the claimant under such coverage can exceed the conversion coverage limit.
Underinsured Motorist Conversion Coverage
This is a new category of underinsured motorist coverage. It requires insurers to offer uninsured motorist coverage in an amount up to twice the limits of the insured's liability coverage.
This coverage is in lieu of the statutory uninsured motorist coverage provided by C.G.S. '38a-336.
The limit of this coverage is not subject to a reduction for amounts paid by or on behalf of the tortfeasor.
As a result, the total amount of recovery by the claimant may exceed the underinsured motorist conversion coverage limit.
Since conversion coverage is in lieu of the statutory underinsured motorist coverage, and the regulations apply only to statutory underinsured motorist coverage, whether any of the other reductions or exclusions would apply to this coverage is a question.
The Act also changed the definition of what constitutes an "underinsured motor vehicle." The Act defines an underinsured motor vehicle as a "motor vehicle with respect to which the sum of the limits of liability under all bodily injury liability bonds and insurance policies applicable at the time of the accident is less than the fair, just and reasonable damages of the covered person."
This definition compares liability limits on the tortfeasor's vehicle with the fair, just and reasonable damages of the covered person. If such damages are greater than the liability coverage, the tortfeasor's vehicle is underinsured.
An insurer providing conversion coverage may exclude from such coverage Aa vehicle owned by the insured or available for the regular use of any family member of the insured. Fleet National Bank v. Aetna Ins. Co., 45 Conn. Supp. (1998). Aff'd. 245 Conn. 546 (1998).
EXCLUSIONS
Consent to Settle
Common Law Subrogation. In Berlinski v. Ovellette, 164 Conn. 482 (1973) the court held that at common law and in the absence of a statutory provision to the contrary, a cause of action for personal injuries resulting from negligence could not be assigned before judgment.
This result was changed by the court's decision in Westchester Fire Ins. Co. vs. Allstate Ins. Co., 236 Conn. 362 (1996) which overruled Berlinski and held that an uninsured motorist insurer that had paid uninsured motorist benefits to its insured is subrogated, to the extent of its payments, to the insured=s personal injury cause of action against the tortfeasor.
Public Act 97-58 Sec. 4 legislatively overruled Westchester in part. The Act provides as follows: ANo insurer providing underinsured motorist coverage as required under Title 38a of the General Statutes shall have any right of subrogation against the owner or operator of the underinsured motor vehicle for underinsured motorist benefits paid or payable by the insurer.
This Act prohibits subrogation in the underinsured motorist context only. It continues to allow subrogation against uninsured motorists.
One purpose of a consent to settle requirement is to protect the subrogation rights of the uninsured motorist insurer against the tortfeasor. Berts v. Horace Mann Ins. Co., 14 Conn. Law Rptr. No. 17, 523 (1995).
Since Westchester has been legislatively overruled in part by Public Act 97-58 Section 4 which prohibits subrogation rights in the underinsured motorist context, the purpose of a consent to settle clause in underinsured motorist cases would seem to be vitiated.
Vehicles Owned by or Available for the Regular Use of the Named Insured or Resident Relatives
The purpose of the clause is to cover the insured's infrequent or casual use of vehicles not described in the policy, but to exclude coverage for vehicles the insured regularly uses. Lumbermens Mutual Casualty Co. v. Charland, 6 C.L.T. No. 17 (1980).
Regulation finds its origin in the difference between liability coverage and uninsured motorist coverage. Lowrey v. Valley Forge Ins. Co., 224 Conn. 152 (1992).
The regulation applies generally to one-car accidents in which passengers seek to recover from an insurer under both the liability and underinsured motorist coverage for the vehicle involved in the accident. See Lowrey v. Valley Forge Ins. Co., supra.
Insureds who seek greater protection from their own negligence for their passengers have the option of purchasing greater liability limits, or an umbrella policy. Lowrey v. Valley Forge Ins. Co., supra.
Allowing passengers in an insured vehicle to collect under the liability portion of the policy as well as the underinsured portion would be to convert the underinsured motorist coverage into liability coverage. Lowrey v. Valley Forge Ins. Co.
In the case of a two-car accident, the exclusion has been found to be inapplicable and a passenger has been allowed to assert a claim under both the liability portion of the policy and the underinsured portion of the same policy. Cataline v. General Accident Ins., 11 Conn. L.Rptr. No. 16, 502 (1994).
Self-Insurers
This exclusion prohibits an uninsured motorist claim if the tortfeasing vehicle is owned by a self-insurer. Orkney v. Hanover Ins. Co., 248 Conn. 195 (1999).
Government-Owned Vehicles
This exclusion prohibits an uninsured motorist claim if the tortfeasing vehicle is owned by a government or agency thereof.
Reimbursement for Workers' Compensation Benefits
Uninsured motorist limits may be reduced by workers' compensation benefits received by a claimant thereby reducing the claimant's damages.
Although a workers' compensation insurer is entitled to a lien on the claimant's recovery arising out of a third party claim, a workers' comp insurer does not have a lien on or a right of reimbursement from the claimant's recovery of uninsured motorist benefits. Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375 (1997).
Causal Connection of Uninsured Motor Vehicle with Accident
The regulation requires that the uninsured motor vehicle be causally connected to the loss for which the claimant seeks compensation. Travelers Ins. Co. v. Kula, 216 Conn. 390; Regs. Conn. State Agency, '38a-334-6(a).
Person-Oriented Coverage
Public Act 83-461 amended '38a-336 to provide that "no insurer shall be required to provide uninsured motorist coverage to (a) a named insured or relatives residing in his household when occupying, or struck as a pedestrian by, an uninsured or underinsured motor vehicle or motorcycle that is owned by the named insured, or (b) to any insured occupying an uninsured or underinsured motor vehicle owned by such insured."
This amendment changes the person-oriented nature of uninsured motorist coverage to some degree to a vehicle-oriented type of coverage.
The statutory term "underinsured motor vehicle" refers to a tortfeasing vehicle. Sentry Insurance Co. v. Schroeder, 9 Conn. L.Rptr., No. 12, 375 (1993). If the underinsured motor vehicle is not the tortfeasing motor vehicle, the exclusion does not apply. Aetna Casualty and Surety Co., et al v. Arduini, et al, 4 Conn. L.Rptr. No. 9, 288 (1991).
Coverage for Resident Relatives Owning Their Own Vehicles
An insurer may exclude from uninsured motorist coverage a resident relative of the named insured who owns his or her own car and who is injured by an uninsured motorist while occupying his or her own car. Middlesex Assurance Co. v. Quinn, 225 Conn. 257 (1993).
Named Driver Exclusion
C.G.S. Section 38a-335(d) and Regs. Conn. State Agency Sec. 38a-334-5(c)(a) allow an insurer to exclude by endorsement the named insured and residents residing in his or her household from coverage under the liability portion of the policy. The rationale behind such exclusion is to allow unlicensed persons who own a motor vehicle, such as the elderly or handicapped, to benefit by having other persons operate their vehicles. Colonial Penn Ins. Co. vs. Patriot General Ins. Co., 22 Conn. Law Rptr. No. 10, 355 (1998).
Therefore, an insured who executed a named driver exclusion endorsement which endorsement excludes her from liability coverage while operating the insured vehicle, and who was involved in a collision while operating the vehicle insured under the policy, is excluded from liability coverage under the policy insuring the vehicle and such exclusion renders said vehicle an uninsured motor vehicle. Colonial Penn Ins. Co. vs. Patriot General Ins. Co., 22 Conn. Law Rptr. No. 10, 355 (1998).