Opinion ID: 1135809
Heading Depth: 1
Heading Rank: 5

Heading: whether usf & g is entitled to an offset credit for amounts paid by the negligent underinsured motorist's liability insurance carrier?

Text: ¶ 13. The circuit court refused to allow USF & G a $25,000 credit for the amount paid by Allstate to Mrs. Ferguson. USF & G contends that the lower court's decision was against this Court's ruling in State Farm Mutual Auto. Insurance Co. v. Kuehling, 475 So.2d 1159 (Miss. 1985). In Kuehling, we upheld an offset clause, finding that the uninsured motorist statute does not prohibit an insurance company from offsetting UM benefits by any amount paid by the tortfeasor's carrier. Id. at 1163. The insurance company is bound to pay only that amount which constitutes the difference between policy limits available under an insured's own policy and that amount received from one underinsured. Id. ¶ 14. Mrs. Ferguson argues that since she suffered damages in excess of the total of both Sipes's liability coverage and the aggregate of her own UMBI coverage, then USF & G is not entitled to an offset. She asserts that such an offset does not make the victim whole and is therefore against public policy. ¶ 15. In Kuehling, the insured only incurred damages in the amount of $11,382.90, while receiving $10,000 from the tortfeasor's insurance carrier, $5000 in medical benefits from her own insurance company, and another $10,000 from her insurance company for underinsured motorist coverage. Id. at 1160. Based in part upon the fact that Ms. Kuehling had already received $25,000 for only $11,382.90 in proven damages, this Court held that Ms. Kuehling was not entitled to any further recovery from her insurance carrier in the form of uninsured motorist aggregate coverage. Id. at 1163. However, we did not limit the rule in Kuehling to cases in which the amount of proven damages is less than the total amount of coverage available. Id. In fact, we have since applied Kuehling to cases similar to this one in which allowing the offset has prevented the injured insured from receiving full compensation for his injuries. Miller v. Allstate Insurance Co., 631 So.2d 789, 791 (Miss. 1994); Dixie Insurance Co. v. State Farm Mutual Auto. Insurance Co., 614 So.2d 918, 922-23 (Miss. 1992); Brown v. Maryland Casualty Co., 521 So.2d 854, 857 (Miss. 1987). ¶ 16. The purpose of uninsured motorist coverage is to provide protection for the insured to the extent that the underinsured tortfeasor cannot pay. It is not against public policy to allow an insurance company to maintain an offset clause to recover that portion of damages for which the tortfeasor is insured. The circuit court erred in refusing to allow the offset of $25,000 in this case.