A worker injured in a car accident while on the job will receive payment from his insurance company after the Indiana Court of Appeals ruled that the policy provision that reduced coverage by the amount paid on payment of a workers’ compensation claim was inconsistent with the state’s underinsured motorist status.
Donald Kearschner was involved in a motor vehicle collision while working at Walmart and injured his shoulder. The other driver was convicted, but his auto insurance policy had a $50,000 limit.
Kearschner’s auto insurance policy included an underinsured motorist endorsement of $100,000 per person/$300,000 per accident. In addition, the policy contained a provision that a payment received from a workers’ compensation claim would reduce the coverage benefit.
After Kearschner sued, he and the other driver settled for $50,000, but American Family sought summary judgment. The insurance company argued that under Kearschner’s policy, he had already received $50,000 from the other driver and $62,084.52 in workers’ compensation. Because the combined amount exceeded her underinsured motorist coverage by $100,000, American Family argued that she owed nothing to Kearschner.
Kearschner countered that the policy’s compensation for workers’ compensation payments was “void” and “unenforceable” because it was against state law. He pointed to the state’s underinsured motorist law, Indiana Code § 27-7-5-2, and asserted that the law contained two minimum coverages of $50,000 or “an amount at least equal to the bodily injury liability coverage,” which under Kearschner’s policy was $100,000. The insurance company would not have to provide such coverage only if the insured refused payment in writing.
Owen Circuit Court granted summary judgment, but the Court of Appeals reversed in Donald Kearschner c. American Family Mutual Insurance Company, SI., 21A-CT-1888, Wednesday.
The American family relied on Justice v. Am Fam. Mut. Ins. Co., 4 NE 3d 1171 (Ind. 2014) to support his argument that Kearschner’s underinsured liability limit had been reduced to zero.
However, the appeal panel noted that Justice The court ruled that the investigation should go beyond the examination of the insurance policy. Specifically, the judges noted that it had to be determined whether the policy provision complied with the state’s underinsured motorist law.
They noted that the wording of the underinsured law required insurers to provide an insured with a minimum amount of underinsured motorist coverage of $50,000.
A sin Justicethe Court of Appeals found that American Family’s decision to reduce Kearschner’s underinsured payout by the amount he received from workers’ compensation was “contrary to the relevant part of the statute of the UIM and therefore unenforceable”.
The appeals court found that Kearschner was entitled to the difference between his underinsured policy limit of $100,000 and the $50,000 he received from the other driver.
“The reduction in workers’ compensation in the UIM limit reduction provision resulted in a zeroing of Kearschner’s UIM policy limit and diminished the protection required by UIM statute,” Judge Rudolph wrote. Pyle for court. “AFI’s policy provision attempting to reduce Kearschner’s UIM policy limit to zero based on payment of any workers’ compensation provided less coverage than required by UIM law and is inconsistent with the view that the UIM law is a comprehensive remedial law. Thus, we conclude that this specific provision of the Policy is unlawful and unenforceable. »
In a footnote, the appeal panel noted that American Family cited Justice and Anderson v. Ind. Ins. Co., 8 NE3d 258, 262 (Ind. Ct. App. 2014) and argued that underinsured motorist policies that contain exclusions for workers’ compensation are permitted as long as the insured receives at less $50,000 from the other driver alone or from a combination of the other driver’s and the insurance company’s payments.
The Court of Appeal rejected this argument.
“…We note that the Justice and anderson The courts only addressed the $50,000 UIM legal minimum discussed in the UIM statute,” Pyle wrote. “No case has addressed the UIM statutory minimum in Indiana Code § 27-7-5-2(a) which requires an insurer to provide UIM coverage to extents at least equal to the liability limits specified in the bodily injury liability provisions of an insured policy, unless the insured refuses in writing. Here, this provision is applicable to the present case on appeal.