Insurance Policy – Coverage – Underinsured Motorist Coverage

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WI Court of Appeals – District IV

Case Name: Jessica Pierce, et al v. Mid-Century Insurance Company, et al

Case No.: 2015AP2408

Officials: Lundsten, Sherman and Blanchard, JJ

Focus: Insurance Policy – Coverage – Underinsured Motorist Coverage

This appeal relates to the enforceability of an automobile insurance policy provision that is part of the policy’s definition of an underinsured motor vehicle. As pertinent here, this provision has the effect of excluding passengers of an insured’s vehicle from the policy’s underinsured motorist (UIM) coverage when the insured driver was at fault and was operating a vehicle insured by the policy’s liability coverage. The main purpose of this exclusion, as explained below, is to prevent a policy’s UIM coverage from acting as supplementary liability coverage under the same policy. The appellants here were injured while passengers in a vehicle insured by a policy containing this exclusion. The insurer, Mid-Century Insurance Company, denied UIM coverage based on the exclusion. The issue here is whether provisions in Wisconsin’s omnibus automobile insurance statute, WIS. STAT. § 632.32(5)(e) and (6)(b)2.a., prohibit or allow the exclusion.  Like the circuit court, we resolve this issue against the appellant passengers. Accordingly, we affirm the court’s order dismissing the passengers’ claims for UIM coverage.

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.