Starcher, C.J., dissenting:
I dissent, because I agree with the appellant's argument: the policy language
at issue in this case (and in many of the precedents relied upon by the majority) is contrary
to our automobile insurance statutes and therefore unenforceable.
Insurance cases should begin with a word-by-word comparison of the language
in the insurance policy with the language of our automobile insurance statutes. As we held
in Adkins v. Meador, 201 W.Va. 148, 153, 494 S.E.2d 915, 920 (1997) , “In construing any
insurance policy, it is appropriate to begin by considering whether the policy language is in
accord with West Virginia law. The terms of the policy should be construed in light of the
language, purpose and intent of the applicable statute.” Provisions in an insurance policy
that are more restrictive than statutory requirements are void and ineffective as against public
policy. See Syllabus Point 2, Universal Underwriters Ins. Co. v. Taylor, 185 W.Va. 606, 408
S.E.2d 358 (1991); Syllabus Point 1, Bell v. State Farm Mut. Auto. Ins. Co., 157 W.Va. 623,
207 S.E.2d 147 (1974); Syllabus Point 2, Johnson v. Continental Casualty Co., 157 W.Va.
572, 201 S.E.2d 292 (1973).
When the language of an insurance policy is contrary to statute and therefore
void, the policy should be construed to contain the coverage required by West Virginia law.
W.Va. Code, 33-6-17 [1957] mandates that:
Any insurance policy, rider, or endorsement hereafter issued
and otherwise valid which contains any condition or provision
not in compliance with the requirements of this chapter, shall
not be thereby rendered invalid but shall be construed and
applied in accordance with such conditions and provisions as
would have applied had such policy, rider, or endorsement been
in full compliance with this chapter.
To understand why the State Farm policy in this case is contrary to our
insurance statutes, and therefore void, requires an understanding of the facts. The facts are
very simple: State Farm issued an insurance policy on a car that contained two kinds of
coverage: liability insurance, and insurance against underinsured motorists. The owners of
the car paid separate premiums for both kinds of insurance.
The plaintiff was a passenger in the car. The defendant driver of the car was
negligent and drove the car off the road. Put another way, the driver of the car is a tortfeasor
who breached his duty of care to his passenger, thereby causing her bodily injury.
Through the operation of our common law of torts, we can say that liability has
been imposed upon the driver for his passenger's bodily injuries. West Virginia law requires
that every car carry liability insurance that insures “the person named therein and any other
person . . . using such vehicle . . . against loss from the liability imposed by law for damages
arising out of the ownership, operation, maintenance or use of such vehicle[.]” W.Va. Code,
17D-4-12 [1991] (emphasis added). This requirement is mirrored in another statute, which
states that “[n]o policy or contract of bodily injury liability insurance . . . covering liability
arising from the ownership, maintenance or use of any motor vehicle, shall be issued or
delivered . . . unless it shall contain a provision insuring the named insured and any other
person . . . against liability for death or bodily injury sustained . . . as a result of negligence
in the operation or use of such vehicle.” W.Va. Code, 33-6-31(a) [1998] (emphasis added).
In this case, there was in effect a State Farm liability insurance policy that
insured the driver, or any other person using the vehicle, “against loss from the liability
imposed by law for damages arising out of the ownership, operation, maintenance or use of
such vehicle[.]” Under this liability portion of the State Farm policy, State Farm paid the
passenger of the car the full limits of the liability policy.
The passenger of the car did not, however, receive her full damages, because
the driver of the car was “underinsured.” To protect the citizens of West Virginia from
drivers who buy insufficient amounts of liability insurance, the Legislature decreed that in
every motor vehicle policy that is sold in West Virginia, the insurance company must
“provide an option” for the “insured” to buy coverage that will “pay the insured all sums [up
to the limits of underinsured motorist coverage purchased] which he shall legally be entitled
to recover as damages from the owner or operator of an . . . underinsured motor vehicle . .
. without setoff against the insured's policy or any other policy.” W.Va. Code, 33-6-31(b)
(emphasis added). In sum, to recover benefits under this type of insurance coverage, the
“insured” must prove that he or she is legally entitled to recover damages from a tortfeasor
who doesn't have enough coverage to fully indemnify the insured's losses.
The statute defines an “insured” to mean the person named on the declarations
page of the policy; if living in the same household, the spouse and relatives of the person
named on the declarations page; and any other person who “uses” the vehicle. W.Va. Code,
33-6-31(c).
The statute plainly mandates that coverage against a driver or operator of an
underinsured motor vehicle protects the person named on the declarations page of the policy
and their spouse and their relatives, against bodily injuries caused by the underinsured driver,
regardless of where they are when the injury occurs. There is no spatial or temporal
requirement that the insured be riding in the insured car for coverage to apply. As one court
stated, underinsured motorist coverage
. . . is portable: The insured and family members are covered not
only when occupying the covered vehicle, but also when in
another automobile, and when on foot, on a bicycle or even
sitting on a porch. . . .
The status of the named insured and his relatives as persons
insured against negligent uninsured motorists is not altered by
there being other family vehicles having no uninsured motorist
coverage. They acquire their insured status when coverage is
purchased for any household vehicle. Thereafter, they are
insured no matter where they are injured. They are insured
when injured in an owned vehicle named in the policy, in an
owned vehicle not named in the policy, in an unowned vehicle,
on a motorcycle, on a bicycle, whether afoot or on horseback or
even on a pogo stick.
Bradley v. Mid-Century Ins. Co., 409 Mich. 1, 24-38, 294 N.W.2d 141, 145-152 (1980) . See
also, 1 Alan I. Widiss, Uninsured and Underinsured Motorist Insurance § 4.2, at 60-61 (2d
ed. 1992) (“Persons who are either named insureds or family members residing with a named
insured . . . are afforded relatively comprehensive protection by the provisions used in most
uninsured motorist insurance coverages.” As insureds they “are protected when they are
operating or are passengers in a motor vehicle, as well as when they are engaged in any other
activity such as walking, riding a bicycle, driving a hay wagon, or even sitting on a front
porch.”)
In this case, State Farm admits that it sold underinsured motorist coverage to
the plaintiff-passenger. West Virginia law mandates that the coverage is supposed to follow
her wherever she might be, whether walking down the road, riding a bicycle, driving a hay
wagon, riding on horseback, bouncing on a pogo stick, or sitting on a front porch. W.Va.
Code, 33-6-31(b) and (c) make no exceptions.
State Farm, however, ignored the statute and went ahead and made an
exception to the requirements of W.Va. Code, 33-6-31(b) and (c), and squeezed an exclusion
in its policy that denied the plaintiff-passenger any protection if the underinsured motorist
happened to be her “spouse or any relative” or the vehicle that was being driven was “insured
under the liability coverage of this policy.”
Furthermore, W.Va. Code, 33-6-31(b) defines an “underinsured motor vehicle”
as “a motor vehicle with respect to the ownership, operation or use of which there is liability
insurance applicable at the time of the accident, but the limits of that insurance are either:
(i) Less than limits the insured carried for underinsured motorists' coverage; or (ii) has been
reduced by payments to others injured in the accident to limits less than limits the insured
carried for underinsured motorists' coverage.” Remarkably, the Legislature repeats the
statement that “[n]o sums payable as a result of underinsured motorists' coverage shall be
reduced by payments made under the insured's policy or any other policy.”
The State Farm policy limits this definition of underinsured motor vehicle to
exclude such vehicles as those insured by the liability portion of the same policy, or vehicles
routinely used by the family. Again, State Farm ignored the statute, and gives less coverage
than what the Legislature mandated when it passed the statute. And again, it ignored the
mandate that is found twice in W.Va. Code, 33-6-31(b) that underinsured motorist coverage
cannot “be reduced by payments made under the insured's policy or any other policy.”
To summarize, first, the exceptions contained in the State Farm policy are
found nowhere in the West Virginia Code. If the Legislature wanted insurance consumers
to be able to buy protection against underinsured motorists that had more holes than Swiss
cheese, it would have said so. It didn't, and the law mandates comprehensive coverage.
Second, the Legislature mandates that underinsured motorist coverage pay the
“insured” his or her damages “without setoff against the insured's policy or any other
policy.” State Farm's policy language violates this statutory provision, because it essentially
offsets the insured's underinsured motorist coverage by any amounts recovered under another
policy.
Third, State Farm argued _ and the majority opinion appears to have bought
it _ that the plaintiff-passenger was trying to convert “relatively inexpensive underinsured
coverage to liability coverage.” In other words, the plaintiff-passenger was trying to get a
“double recovery” under the policy. This is just wrong. Two separate premiums were paid
for these two coverages, and the coverages protect two different people, regardless of the
amount the insurance company charged for a premium. The plaintiff-passenger bought
underinsured motorist coverage to protect herself against the liability of a motorist with too
little insurance. The tortfeasor bought liability insurance coverage to protect himself should
he ever become liable for bodily injury damages to someone else. Both parties should be
allowed to get that for which they paid.
The plaintiff-passenger in this case paid for protection against bodily injuries
that might be caused by an underinsured driver. As fate would have it, that underinsured
driver was her husband. Our automobile insurance laws mandate that underinsured motorist
protection follow the plaintiff-passenger wherever she goes, but State Farm's exclusion is
blatantly contrary to that statutory mandate.
State Farm's policy language is contrary to the statute, and denies the plaintiff
that for which she bargained and paid. I therefore respectfully dissent.