UIM Coverage is not Limited to Named Insureds riding in Covered Autos
In Grinnell Mutual Reinsurance Co. v. Haight, Nicole Haight was hurt in a single-car accident while a passenger in a car driven by Brian Day. Her medical bills exceeded $50,000 in bodily injury coverage that Day had through his carrier, Country Insurance. She then sought a claim for underinsured motorist coverage on a policy Grinnell Mutual Reinsurance Co. had been issued to her father. Day is not related to the Haights, nor did he work for Shawn Haight, and Day’s car was not one of the two vehicles listed on Shawn Haight’s policy. Grinnell Mutual maintained that Nicole was not entitled to UIM coverage under the policy issued to her father because she did not ride in a “covered auto” during the accident; Grinnell filed this action in which it sought a declaratory judgment to that effect.
The court reviewed whether Haight was entitled to UIM coverage under the policy because she did not ride in a covered auto. The UIM endorsement contains a “Named Insured” box, and “Shawn Haight” is filled in. He is also the “Named Insured” on the Business Auto Coverage Form Declarations. Some of the other documents refer to “Shawn Haight d/b/a SMH Rebuilding,” but Grinnell does not contend that those references mean that the “Named Insured” in the UIM endorsement is something other than an individual. There was also no dispute that Nicole is a “family member” of Shawn Haight under the terms of the endorsement. The UIM endorsement defined “family member” to include a person related to the named insured by blood who resides in the named insured’s household. Nicole was a teenager at the time of the accident, with parents who shared joint custody, and the parties do not dispute that she resided with her father for purposes of the policy.
Grinnell, however, contends that a read of the policy as a whole demonstrates that Nicole needed to occupy a “covered auto” to be afforded UIM coverage. Nicole was not in a covered auto during the accident, so Grinnell says she does not receive UIM coverage under the policy. We conclude that the policy affords UIM coverage to the individual named insured and his family members, which does not require occupation of a covered auto. Nicole is therefore entitled to coverage.
The Business Auto Coverage Form stated that the “insured” means the person qualifying as an insured in the “Who Is an Insured” provision of the applicable coverage. The applicable coverage here, the UIM Endorsement, stated in its “Who Is an Insured” section that: “when as here the named insured is an individual, then pursuant to B.1.a the named insured and any family members are “insureds.” So Nicole was entitled to coverage by the terms of B.1.a., as there was no qualification in B.1.a that the named insured or family member must have been occupying a covered auto. The Business Auto Coverage Form only deemed “insureds” for liability coverage to be persons who occupy covered autos, which does not change our analysis. The “Who Is an Insured” provision in the liability coverage form specified that persons must be in a covered auto to be insured. But that is a liability provision, not a UIM provision, and the form also specifies that “insured” means the person or organization who qualifies as an insured in the “Who Is an Insured” provision of the applicable insurance. The UIM endorsement had its own provision that defined who the insured was for its purposes. Grinnell also emphasized that the declarations page of the Business Auto Coverage Form shows “7” next to the selected coverage, including UIM coverage, which signified that the coverage only applied to “Specifically Described ‘Autos.’ ” The court did not render the “7” designation irrelevant. Which autos are covered can be relevant in determining UIM coverage, including when sections B.1.b and B.2 apply, so the identity of covered autos was necessary and relevant. But when there is no reference to a “covered auto,” reference to the list of covered autos is not necessary.
The court found that the UIM endorsement contained its own definition of who is insured and for individuals that included the named insured and family members, with no requirement that they occupy a covered auto. Also the Business Auto Coverage Form deeming “insureds” for liability coverage only to be persons who occupied covered autos did not preclude UIM coverage for daughter.
Grinnell Mutual Reinsurance Co. v. Haight, 697 F.3d 582 (7th Cir. 2012).
