Many car insurance policy holders don’t understand the difference between stacked underinsured motorist coverage in South Carolina and non-stacked coverage – other than perhaps that the former costs more.
Becoming educated on the issue could prove highly beneficial in the long run.
In the case of Carter v. Standard Fire Insurance, reviewed recently by the South Carolina Supreme Court, the difference between stacked and non-stacked coverage meant $750,000 more in pay-outs following a devastating car accident.
The crash happened in the fall of 2006. Michael and Bernie were young men and close friends. At the time of the crash, Bernie was driving Michael’s mother’s vehicle. Bernie died. Michael became paralyzed.
Subsequently, Michael and his parents sued Bernie’s estate, alleging that he had been driving recklessly and negligently and was therefore liable for the injuries Michael sustained.
The vehicle involved in the crash was insured by Allstate, which settled with Michael on behalf of Bernie’s estate. The available liability coverage was limited at $250,000, and he received another $100,000 under a policy that Allstate had issued to Bernie. Allstate also paid $500,000 to Michael because it was his insurer as well. So he received a total of $850,000 from Allstate.
Subsequent to this, Michael sought to collect on underinsured motorist coverage from a Standard Fire insurance policy that was issued to his parents. It covered the three vehicles his parents owned – including the one involved in the wreck. That policy allowed up to $750,000 in coverage – $250,000 per person and $500,000 per crash.
However, there was an exclusion in the policy. This exclusion held that underinsured motorist coverage would not be provided for either property damage or bodily injury to any person who was occupying a vehicle owned by the policy holder at the time of the wreck or who was a family member not insured under the policy.
A covered family member was one who was related by blood, marriage or adoption and who is a resident of the household of the policy member.
Although Michael was not listed as one of the insureds on the policy, he did live with his parents and, as a resident relative, would be considered covered.
However, Standard Fire denied the claim based on the above exclusion.
Subsequently, Michael and his parents brought a claim against the insurance company for breaching the terms of its own policy. They claimed that the policy allowed Michael to stack his underinsured motorist coverage.
The circuit court initially granted Standard Fire’s motion for a summary judgment, finding that the claimants were not allowed to stack coverage because Michael wasn’t entitled to coverage in the first place. However, this finding was reversed by the appellate court. The state supreme court later upheld this reversal, granting Michael the right to stack the underinsured motorist coverage.
Basing its ruling on the findings reached in Ruppe v. Auto-Owners Ins. Co., the high court ruled that an insurer can’t contractually limit insurance coverage in direct conflict with state law. Further, South Carolina Code 38-77-160 allows for stacking within certain limits, and the insurer’s exclusionary policy was found to be in violation of this law.
If you or a loved one has suffered an injury in South Carolina, contact Grimes Teich Anderson LLP. Call 1.800.533.6845. No Attorney Fees Until You’ve Been Paid.
Carter v. Standard Fire Insurance, Dec. 11, 2013, South Carolina Supreme Court
More Blog Entries:
Fewer North Carolina Workplace Fatalities in 2012, Oct. 31, 2013, South Carolina Car Accident Lawyer Blog