This case involves an underinsured motorist provision in an automobile insurance policy. Appellee Hosea Williams's son, Christopher Williams, died in April 1995 as a result of an accident that occurred while riding as a passenger in a vehicle driven by Jason Howard that was struck by a vehicledriven by Donald Patten. Appellee then sued appellant in the Pulaski County Circuit Court for recovery of the UIM benefits. The Beavers case, although dealing with a different set of facts, provides this Court with important guidelines for resolving your issues. Uninsured coverage applies when a tortfeasor either has no insurance or has less than the amount required by law.
Coverage is designed to guarantee a minimum recovery equal to that amount.
Underinsuredcoverage applies when the tortfeasor has at least the amount of insurance required by law, but not enough to fully compensate the victim. This coverage is designed to provide compensation to the extent of the injury, subject to the policy limit. Justice Holt also set out the change in the underinsured motorist statute. The original version, codified at Ark. Code Ann. Coverage of the insured pursuant to underinsured motorist coverage shall not be reduced by the tortfeasor's insurance coverage, except to the extent that the injured party would receive compensation in excess of his damages.