Court Opinion

ID: 9700527
Source: CourtListenerOpinion
Date Created: 2023-08-25 21:33:49.200584+00
Date Added: 2024-06-11T18:21:10.407427
License: Public Domain

AMUNDSON, Justice
(concurring specially).
The legislature in South Dakota has decided that any liability policy issued or delivered in South Dakota is to provide under-insured motorist coverage and this required coverage is not to exceed $100,000 per person for bodily injury or death in any one accident, $300,000 for bodily injury or death of two or more persons in any one accident. SDCL 58-11-9.4. Under this statute, an insured can request additional coverage. The record in this case does not disclose such a request having been made by the plain tiff/insured. In conjunction with this required coverage, the legislature has also provided that the maximum amount an insured can recover under same is the difference between the tort-feasor’s liability limits and the insured’s underin-sured coverage limit. SDCL 58-11-9.5.
Under the definition contained in Farmland’s policy, a person purchasing the un-derinsurance coverage might reasonably believe he/she is buying protection in any situation where the tort-feasor’s liability coverage is less than the damages the insured is entitled to recover. Under the policy adopted for the type of mandated coverage in South Dakota, the existence of damages in excess of the tort-feasor’s liability limits does not automatically mean underinsured coverage is available. If the tort-feasor has liability coverage with limits equal to or greater than the limits of the injured party’s underinsured coverage, then the injured party has no underinsured benefits available even if his damages far exceed the tort-feasor’s liability limits. An injured party can receive underinsured benefits only when his damages and limits of underinsurance coverage exceed the tort-feasor’s liability limits. It is certainly understandable that a lay person purchasing this type of coverage would think that they had not received the coverage they thought they were purchasing. It is highly unlikely that the majority of individuals purchasing this type of coverage read the applicable statutes or, if so, would understand them prior to purchasing insurance coverage.
In this case, plaintiff has made a claim for these benefits prior to making a claim against the tort-feasor. In Johnson v. American Family Mut. Ins. Co., 426 N.W.2d 419, 422 (Minn.1988), the Minnesota Supreme Court held: “Underinsured motorist coverage is not an alternative to liability coverage. This is not some optional protection which an insured party can chose in lieu of asserting a claim against an insured tort feasor.”
The plaintiff certainly appears to be pursuing an alternative coverage theory in this case and I cannot agree that there is such coverage available under the mandated un-derinsured policy in South Dakota.