Court Opinion

ID: 9669084
Source: CourtListenerOpinion
Date Created: 2023-08-24 02:39:05.426391+00
Date Added: 2024-06-11T18:15:51.895968
License: Public Domain

SPAIN, Justice,
dissenting.
Respectfully, I dissent. The Majority and the courts below apparently view the decision to be reached in this case as simply requiring a “warming over” of the decision reached earlier in Meridian Mutual Insurance Company v. Siddons, Ky., 451 S.W.2d 831 (1970), and its offspring, including Ohio Casualty Insurance Company v. Stanfield, Ky., 581 S.W.2d 555 (1979); Hamilton v. Allstate Ins. Co., Ky., 789 S.W.2d 751 (1990); and Chaffin v. Kentucky Farm Bureau Insurance Companies, 789 S.W.2d 754 (1990). I perceive a fundamental difference, since the basis of all the above decisions was clearly that Kentucky’s public policy as recognized and enunciated by the General Assembly regarding uninsured motorist (UM) coverage, outweighed the right of the parties to contract freely. No similar public policy has been proven to my satisfaction with regard to the “stacking” of under-insured motorist (UIM) coverages.
*330It is significant to me that UM coverage must be automatically provided in every motor vehicle liability policy issued or delivered in Kentucky, unless rejected by the insured in writing. KRS 304.20-020(1). UIM coverage, on the other hand, need not be included in any such policy unless specifically requested by the insured. KRS 304.39-320(2).
In Flowers v. Wells, Ky.App., 602 S.W.2d 179 (1980), it was held that an insured’s request for “full coverage” did not include UIM coverage because such coverage was not “mandatory,” but “optional.” The opinion stated at page 179, “The legislature obviously could have made underinsured coverage mandatory but elected to require it to be furnished only ‘on request.’”
Professor Alan I. Widiss, a well-recognized authority in the field, has commented on certain distinctions drawn between UM and UIM coverages:
Numerous appellate court decisions addressing various coverage issues have arisen in connection with underinsured motorist insurance....
Although many of these eases involve issues that are essentially the same as those considered by the courts in regard to uninsured motorist insurance, there are several reasons why the questions presented in these cases are sufficiently distinctive to warrant being analyzed as a separate body of insurance law.
* * * * * *
[M]any insurance companies have voluntarily offered underinsured motorist insurance to purchasers in states that have not adopted statutory requirements for such coverage. When coverage issues arise in these states, it should be remembered that the courts may not view the underinsured motorist insurance as being imbued with the same public policy interest that has been generally recognized and applied by courts in regard to the scope of coverage appropriately accorded to the uninsured motorist coverage....
2 A. Widiss, Uninsured and Underinsured Motorist Insurance § 31.6 (2d ed. 1990).
This being true, it is apparent that although Kentucky statutes mandate UM coverage for each insured vehicle (the linchpin for the decision in Siddons, supra), there is no similar requirement of UIM coverage at all, much less one that requires each vehicle to have such. Furthermore, while all specific UM coverage policy provisions are mandatory, in that they must be approved by the Commissioner of Insurance, the UIM statute provides that Kentucky insurers are allowed to create the terms and conditions of that coverage for themselves. KRS 304.39-320(2).
Having concluded that there has been no clear pronouncement of public policy by the General Assembly mandating stacking of UIM coverages in Kentucky, we are left with the inescapable fact that the parties were free to contract against such stacking. In the case at hand, the appellee and her late husband had an automobile insurance policy with the appellant, insuring their two vehicles. Each vehicle was insured with UIM coverage of up to $25,000, and the policy provided that:
If you have two or more autos insured in your name and one of these autos is involved in an accident, only the coverage limits shown on the declarations page for that auto will apply. When you have two or more autos insured in your name and none of them is involved in the accident, you' may choose any single auto shown on the declarations page and the coverage limits applicable to that auto will apply.
The limits available for any other auto covered by the policy will not be added to the coverage for the involved or chosen auto.
(Policy, pp. 3-4.)
Inasmuch as the appellee’s decedent, Dwayne A. Dicke, died as the result of a one-ear accident while riding as a guest passenger in the vehicle of another, the appellant, Allstate, paid $25,000 to his estate as specified in the policy as quoted above. The tortfeasor’s insurer had already tendered its $50,000 liability coverage, which concededly was insufficient to cover all damages to the estate. Thus, appellees should have no further claim against appellant.
*331The majority opinion recites that the Court relies upon “... the reasonable expectation that payment of separate premiums results in separate coverages, and the public policy against deprivation of purchased cover-age_” In support of limiting Allstate’s UIM liability to one $25,000 payment, the appellant introduced proof in the trial court to refute the applicability in this case of the doctrine of “reasonable expectations.” This evidence in the record clearly reflects that here Mr. and Mrs. Dieke did not pay for stacked UIM coverage. Rather, Allstate’s premiums for UIM coverage on multiple-car policies were not calculated to encompass the increased limits of liability that stacking would entail (doubling, trebling, etc.). While UIM premiums were charged for each insured vehicle separately, the reason for such a charge was solely to account for the increased risk of an accident with an underin-sured motorist arising from the fact that more than one insured vehicle was being used at any given time. Instead of the insured’s having “bought and paid for” double or triple UIM coverage on each car, in fact, the insured was purchasing UIM coverage in a set amount, on each of two or more owned vehicles. The insurer would have refused to write UIM coverage on only one of several owned vehicles, although the logic of the majority opinion seems to suggest that this would be one way to limit UIM total liability.
By reason of all the above, I would have reversed the judgment permitting stacking of UIM benefits and upheld the policy provisions excluding such.
STEPHENS, C.J., joins this dissenting opinion.