Opinion ID: 2621128
Heading Depth: 1
Heading Rank: 4

Heading: State Farm's policy arguments are unpersuasive.

Text: State Farm argues that policy considerations favor its position that punitive damages are not covered by the policy. We have stated that the purpose of punitive damages is to punish and deter; [37] State Farm argues that punitive damages should not be available here because it has engaged in no wrongdoing, and an award of punitive damages would not punish the tortfeasor or deter others like him. This argument is unpersuasive. Under the Lawrences' liability coverage, there is no question that State Farm would be liable for punitive damages awarded against the Lawrences. [38] But coverage for the Lawrences' liability for punitive damages is no different analytically from coverage for an uninsured motorist's intentional or reckless torts. Thus, State Farm's argument proves too much. Its suggestion that the Lawrences' liability policies should also not provide coverage for punitive damages is clearly wrong. The question here ultimately turns not on policy but on what the parties contracted for. The Lawrences essentially bought liability coverage for underinsured motorists who injured them. The terms of that coverage included protection for punitive damages awards from an underinsured motorist. Since that is the coverage they contracted for, there is no reason that they should not obtain it. In sum, the Lawrences' UM/UIM provisions provide coverage for punitive damages because the Lawrences' liability policies provide such coverage, because the Lawrences' policies suggest that they include coverage for the punitive damages of an underinsured tortfeasor, and because public policy does not forbid this result. [39]
State Farm has waived its arguments that the Lawrence parents do not qualify for separate policy limits because the Lawrence parents did not suffer bodily injury and because the Lawrences do not meet their policies' requirement of having been in the same accident as their son. Accordingly, we AFFIRM the superior court's ruling that the Lawrence parents' NIED claims qualify for policy limits separate from those received by their son. Because the Lawrences' liability policies cover them for their own punitive damages, because the policies suggest that they cover the punitive damages of an underinsured tortfeasor, and because public policy does not forbid this result, we also AFFIRM the superior court's ruling that the Lawrences' UM/UIM provisions provide coverage for the punitive damages of an underinsured tortfeasor. [40]