Opinion ID: 1864717
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Heading: UIM policy provision setoff for worker's compensation paid.

Text: Bergstresser's UIM policy with National Farmers provides: Uninsured Motorists Coverage shall not apply to the benefit of any insurer or self-insurer under any workers' compensation or disability benefits law or any similar law.... Any amounts payable will be reduced by: (1) A payment made by the owner or operator of the uninsured motor vehicle or organization which may be legally liable. (2) A payment under the Liability Coverage of this policy. (3) A payment made or amount payable because of the bodily injury under any workers' compensation law or disability benefits law or similar law. National Farmers asserts it is contractually entitled to set off against UIM all worker's compensation paid or payable to Bergstresser. This issue has been addressed by a number of jurisdictions and the overwhelming majority have held such policy provisions invalid. See State Farm Mutual Auto. Ins. Co. v. Cahoon, 287 Ala. 462, 252 So.2d 619 (1971); State Farm Mutual Auto. Ins. Co. v. Karasek, 22 Ariz.App. 87, 523 P.2d 1324 (1974); Travelers v. National Farmers Union Prop. & Cas. Co., 252 Ark. 624, 480 S.W.2d 585 (1972); Nationwide Mut. Ins. Co. v. Hillyer, 32 Colo.App. 163, 509 P.2d 810 (1973); Jeanes v. Nationwide Ins. Co., 532 A.2d 595 (Del.Ch.1987); Leist v. Auto Owners Ins. Co., 160 Ind.App. 322, 311 N.E.2d 828 (1974); Fryer v. National Union Fire Ins. Co., 365 N.W.2d 249 (Minn.1985); Cano v. Travelers Ins. Co., 656 S.W.2d 266 (Mo. 1983); Sullivan v. Doe, 159 Mont. 50, 495 P.2d 193 (1972); Merchants Mut. Ins. Group v. Orthopedic Professional Assoc., 124 N.H. 648, 480 A.2d 840 (1984); Sweeney v. Hartford Accident & Indem. Co., 136 N.J.Super. 591, 347 A.2d 380 (1975); Bartlett v. Nationwide Mut. Ins. Co., 33 Ohio St.2d 50, 294 N.E.2d 665 (1973); Chambers v. Walker, 653 P.2d 931 (Okla.1982); Peterson v. State Farm Mut. Auto. Ins. Co., 238 Or. 106, 393 P.2d 651 (1964); Selected Risks Ins. v. Thompson, 520 Pa. 130, 552 A.2d 1382 (1989); Aldcroft v. Fidelity & Cas. Co., 106 R.I. 311, 259 A.2d 408 (1969); Ferguson v. State Farm Mut. Auto. Ins. Co., 261 S.C. 96, 198 S.E.2d 522 (1973); Thamert v. Continental Cas. Co., 621 P.2d 702 (Utah 1980); Allstate Ins. Co. v. Welch, 45 Wash.App. 740, 727 P.2d 268 (1968); Niemann v. Badger Mut. Ins. Co., 143 Wis.2d 73, 420 N.W.2d 378 (App.1988). We agree with the Pennsylvania Supreme Court which said: The rationale of these courts is varied but certain common themes emerge; first, uninsured motorist coverage is paid for by a separate premium, and to give the uninsured motorist carrier a set-off based on the fortuitous existence of a collateral source would result in a windfall to the carrier; second, uninsured motorist coverage is mandated by statute and any variations from that statutory mandate should come from the legislature; third, workmen's compensation only covers a fraction of what tort damages would cover, and a dollar-for-dollar set-off does not recognize this reality; and fourth, there is no public policy against an individual purchasing additional uninsured motorist coverage to protect himself and his family against the shortfall which could result from a dependency on workmen's compensation. Selected Risks, 552 A.2d at 1388. Moreover, we are guided by the fact that the legislature has not provided any statutory setoff of worker's compensation benefits for UIM carriers. Where the legislature intended to grant such a setoff, it has specifically provided one. South Dakota Medical Service, Inc. v. Minnesota Mutual Fire & Cas. Co., 303 N.W.2d 358 (S.D.1981) (finding provision excluding coverage for benefits provided by worker's compensation was statutorily provided by SDCL 58-17-10); accord, Westphal v. Amoco Ins. Co., 87 S.D. 404, 209 N.W.2d 555 (1973) (holding UIM policy provision decreasing amount due passenger by amount paid by driver's UIM was invalid if it reduced recovery below actual loss); Meyers, 88 S.D. at 168, 216 N.W.2d at 821 (stating compensation carrier should not be beneficiary of claimant's personal policy). Therefore, a policy provision purporting to reduce UIM benefits paid by worker's compensation is void as a matter of public policy.