Opinion ID: 2639219
Heading Depth: 1
Heading Rank: 3

Heading: Coverage Under K.S.A. 40-284(b)

Text: K.S.A. 40-284(b) provides for and requires UIM coverage: Any uninsured motorist coverage shall include an underinsured motorist provision which enables the insured or the insured's legal representative to recover from the insurer the amount of damages for bodily injury or death to which the insured is legally entitled from the owner or operator of another motor vehicle with coverage limits equal to the limits of liability provided by such uninsured motorist coverage to the extent such coverage exceeds the limits of the bodily injury coverage carried by the owner or operator of the other motor vehicle. Whether the above statutory language requires UIM coverage under the facts of this case involves a construction of the above statutory language. The fundamental rule of statutory construction to which all other rules are subordinate is that the intent of the legislature governs if that intent can be ascertained. Mitchell v. Liberty Mut. Ins. Co., 271 Kan. 684, 694, 24 P.3d 711 (2001). The legislature is presumed to have expressed its intent through the language of the statutory scheme it enacted. When a statute is plain and unambiguous, the court must give effect to the intention of the legislature as expressed rather than determine what the law should or should not be. 271 Kan. at 694-95. Farm Bureau argues that application of the plain and unambiguous language of K.S.A. 40-284(b) to the undisputed facts of this case results in a conclusion that no UIM coverage exists for Halsey. Farm Bureau's UIM coverage in this case is in the amount of $500,000, and the limits of the bodily injury coverage provided by Wilshire insuring the defendants, D&G Trucking and Larry Holmes, is in the amount of $1,000,000. According to the terms of K.S.A. 40-284(b), Farm Bureau argues that UIM coverage would exist only to the extent such coverage [$500,000] exceeds the limits of the bodily injury coverage [$1,000,000] carried by the owner or operator of the other motor vehicle. Farm Bureau concludes, therefore, that since its UIM coverage is less that the limits of the bodily injury coverage carried by the owner or operator of the other motor vehicle, no UIM coverage exists for Halsey. Halsey argues that our interpretation of K.S.A. 40-284(b) must consider the use of the word coverage and Kansas case law, particularly those cases calling for a liberal interpretation of the provisions of K.S.A. 40-284(b) to provide broad protection to the insured against all damages resulting from injuries sustained by the insured that were caused by an automobile accident and arose out of the ownership, maintenance or use of the insured motor vehicle. Jones v. Automobile Club Inter-Insurance Exchange, 26 Kan. App. 2d 206, 208, 981 P.2d 767, rev. denied 268 Kan. 847 (1999). More importantly, Halsey argues that in accordance with Rich v. Farm Bur. Mut. Ins. Co., 250 Kan. 209, 824 P.2d 955 (1992), this court should consider the legislative intent behind the requirement that insurers provide such mandatory coverage: This coverage is intended to provide recompense to innocent persons who are damaged through the wrongful conduct of motorists who, because they are uninsured or underinsured and not financially responsible, cannot be made to respond in damages. 250 Kan. at 215. Halsey argues that UIM benefits should be owing when the UIM coverage exceeds the actual amount of damages recovered from the tortfeasor. Because of the number of claims against the tortfeasor's policy in this case, the amount Halsey recovered from the tortfeasor was less than Halsey's UIM coverage. According to Halsey's argument, UIM coverage is to fill this gap and provide for coverage in such cases. The issue in this case, highlighted by the respective arguments of the parties, is whether the language in K.S.A. 40-284(b), limits of the bodily injury coverage carried by the owner or operator of the other motor vehicle, refers (1) to the actual benefits received by the insured claimant under the tortfeasor's policy (limits-to-recovery comparison) or (2) to the limits on the face of the tortfeasor's policy (limits-to-limits comparison). If the language requires a limits-to-recovery comparison, Farm Bureau owes its insured Halsey UIM benefits because the amount actually received from the tortfeasor ($103,699.04) is less than Halsey's UIM coverage ($500,000). On the other hand, if the language requires a limits-to-limits comparison, Farm Bureau owes its insured Halsey nothing because the limit of the tortfeasor's policy ($1,000,000) is greater than the limits of the insured's policy ($500,000).