Court Opinion

ID: 9738501
Source: CourtListenerOpinion
Date Created: 2023-08-26 19:54:45.804972+00
Date Added: 2024-06-11T07:24:06.517773
License: Public Domain

*63STEINMETZ, J.
(dissenting). Contrary to the conclusion reached by the majority, op. at 61,1 believe that a reasonable insured who actually read the policy at issue would have understood that in the event of an accident caused by an underinsured motorist, the insured's coverage would be "reduced by all amounts paid by or on behalf of the owner or operator of the underinsured auto." This is the express language of the policy. A reasonable insured would not conclude that the reducing clause, which speaks directly to accidents involving underinsured motorists, would be invalid simply because the policy does not separately define UM coverage and UIM coverage. As the court of appeals stated:
The policy plainly means to provide alternate coverage. It would be entirely unreasonable for an insured to read the policy to provide that the other driver's vehicle, covered by $25,000 of liability insurance, is somehow both uninsured and underin-sured. We conclude that a reasonable person in the position of the insured would read the policy as a statement of alternatives. Kuhn is therefore covered only once under the UM/UIM provisions of the policy.
Kuhn v. Allstate Ins. Co., 181 Wis. 2d 453, 462, 510 N.W.2d 826 (Ct. App. 1993).
UM coverage applies when the tortfeasor has no liability insurance. See Hemerley v. American Fam. Mut. Ins. Co., 127 Wis. 2d 304, 308, 379 N.W.2d 860 (Ct. App 1985). In sharp contrast, UIM coverage applies when the tortfeasor has some liability insurance, but not enough to cover the plaintiffs damages. See, e.g., Kuehn v. Safeco Ins. Co. of America, 140 Wis. 2d 620, 628, 412 N.W.2d 126 (Ct. App. 1987). The *64tortfeasor in this case, who has $25,000 of liability insurance, is unquestionably an UIM. Therefore, she should be treated as an UIM, not as an UM.
UIM coverage and UM coverage serve different purposes and protect against different risks. Accordingly, they should be treated differently. The majority blurs the distinction between the two types of coverage by applying the law relating to UM coverage to the UIM coverage under Allstate's policy. As a result, Wisconsin insurers will face substantially increased UIM coverage losses, and Wisconsin policyholders will face substantially increased premiums.
In an effort to provide coverage for plaintiffs, this area of the law has been stretched so far that I doubt any insurance company, no less an ordinary insured, can have an accurate expectation of the extent of UIM coverage provided under a particular policy. We should give effect to the language in a policy, not to theories developed by lawyers and courts.to enable the plaintiff the greatest recovery possible. I urge the legislature to clarify the insurance law of this state pertaining to stacking and reducing clauses.
For these reasons, I dissent.