Opinion ID: 2271593
Heading Depth: 1
Heading Rank: 3

Heading: Liability insurance includes uninsured motorist coverage

Text: In 1970, the Legislature enacted Insurance Code sections 11580.8 and 11580.9. [3] Section 11580.8 declares it to be the public policy of this state to avoid so far as possible conflicts and litigation, with resulting court congestion, between and among injured parties, insureds, and insurers concerning which, among various policies of liability insurance and the various coverages therein, are responsible as primary, excess, or sole coverage. . . . Section 11580.8 also declares that section 11580.9 expresses the total public policy of this state respecting the order in which two or more of such liability insurance policies covering the same loss shall apply. . . . Progressive argues UM coverage is not within the scope of liability insurance as used in section 11580.9 because UM coverage is first person  not third person  coverage. We disagree. Liability insurance is defined in Insurance Code section 108, which is located in division 1  General Rules Governing Insurance. It states in pertinent part: Liability insurance includes: (a) Insurance against loss resulting from liability for injury, fatal or nonfatal, suffered by any natural person, or resulting from liability for damage to property, or property interests of others but does not include worker's compensation, common carrier liability, boiler and machinery, or team and vehicle insurance. (b)(1) With respect to operations or property covered by a policy of liability insurance as defined in subdivision (a), insurance of medical, hospital, surgical and funeral loss or expense of the insured or other persons injured, and in the case of an automobile liability policy disability benefits to the insured or other persons injured and in the event of their death, funeral and accidental death benefits to their dependents, beneficiaries or personal representatives irrespective of legal liability of the insured, when issued with or supplemental to the insurance defined in subdivision (a); (2) When issued with or supplemental to the insurance defined in subdivision (a), disability insurance covering the insured and members of his household, or other persons who customarily operate any automobile covered by such a policy and who are named in such policy; and such disability insurance may cover against accidental injury, death or dismemberment caused by any or all hazards as defined in such coverage; (c) Insurance covering injuries sustained by an insured resulting from a tort committed by a third party against which such third party is not himself covered by liability insurance. ( Ibid. ) Although subdivision (c) of section 108 does not use the term uninsured motorist coverage this is the type of insurance coverage it describes. The purpose of UM insurance is to allow an insured to recover sums the insured shall be legally entitled to recover as damages for bodily injury or wrongful death from the owner or operator of an uninsured motor vehicle. (§ 11580.2, subd. (a)(1).) Typically one is legally entitled to recover only when the owner or operator of the uninsured vehicle is liable in tort. (Cf. § 108, subd.(c).) The language of both insurance policies brings their UM coverage within the liability definition of section 108. Progressive's policy states in pertinent part: [W]e will pay for damages . . . which an insured person is entitled to recover from the owner or operator of an uninsured motor vehicle . . . because of bodily injury: 1. sustained by an insured person; 2. caused by accident; and 3. arising out of the ownership, maintenance or use of an uninsured motor vehicle. . . . Similarly, the State Farm policy states: We will pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an uninsured motor vehicle. The bodily injury must be sustained by an insured and caused by accident resulting out of the operation, maintenance or use of an uninsured motor vehicle. The State Farm policy continues: Deciding Fault and Amount Under Coverage U. Two questions must be decided by agreement between the insured and us: 1. Is the insured legally entitled to collect damages from the owner or driver of the uninsured motor vehicle; and 2. If so, in what amount. Moreover, in another section of the Insurance Code, the Legislature explicitly defines automobile liability insurance as including UM coverage. Section 660 states, As used in this chapter: [¶] . . . [¶] (b) `Automobile liability coverage' includes only coverage of bodily injury and property damage liability, medical payments, and uninsured motorists coverage. ( Id., subd.(b).) Although section 660 by its terms applies only to Insurance Code chapter 10 (relating to cancellation of contracts), the statute nevertheless shows the Legislature is consistent in including UM coverage under its definition of liability insurance. We find no good reason to conclude the Legislature meant to exclude UM coverage from the concept of liability insurance in section 11580.9.