Recent Developments in the Law of Uninsured and Underinsured Motorist Coverage
| Publication year | 1993 |
| Pages | 2273 |
1993, October, Pg. 2273. Recent Developments in the Law of Uninsured and Underinsured Motorist Coverage
There have been a number of recent developments in the law regarding uninsured and un-derinsured motorist coverage in Colorado. The developments have included changes in the law concerning the calculation and extent of benefits, the amount of coverage available under an insurance policy, contract interpretation and procedural prerequisites to recovery. The following article is intended to highlight these developments in both the Colorado appellate courts and the General Assembly.
Generally, uninsured and underin-sured motorist coverage is intended to provide insurance coverage to an individual in the event that he or she is involved in an accident caused by a motorist who is either uninsured or has limited liability coverage. An individual, by purchasing uninsured and underinsured motorist coverage from his or her own insurance carrier, can recover benefits to the same extent as if the tortfeasor had been insured.
The extent of the benefits available under the uninsured and underinsured provisions of a policy are subject to the limitations contained in the policy, unless otherwise provided by law. Historically, insurers in Colorado have been required to offer uninsured motorist coverage to their insureds since 1965(fn1) and underinsured motorist benefits since 1983.(fn2)
Both the Colorado Supreme Court and the General Assembly have recently addressed the issue of stacking of uninsured and underinsured motorist benefits. In Shelter Mutual Insurance Co. v. Thompson,(fn3) the Colorado Supreme Court decided whether underinsured motorist benefits from several policies issued by the same insurer must be added together, or "stacked," to determine the total amount of underinsured benefits available.
After a 1987 accident, the plaintiff in Thompson claimed that he was entitled to stack the full amount of underinsured motorist benefits on six different policies which had been issued on six separate vehicles. Shelter Mutual argued that each policy contained antistacking clauses which prohibited the aggregating of benefits. Shelter Mutual further argued that the total amount of underinsured benefits available was limited to the highest applicable limit under a single policy.
The court held that the antistacking language in the policy was not void as against public policy and was enforceable. In reaching its decision, the court reaffirmed prior case law in Colorado which held that similar antistacking provisions concerning uninsured motorist benefits do not violate the public policy of this state and are not void.(fn4)
In June 1992, the Colorado General Assembly expressly permitted antistacking provisions.(fn5) CRS § 10-4-402 defines stacking as
[a]ggregating, combining, multiplying, or pyramiding limits of separate policies providing uninsured and underinsured motorist coverage as provided in § 10-4-609.
The amended statutory language allowing prohibitions against stacking, found at CRS § 10-4-609(2), provides in part that
[a] policy may contain provisions which prohibit stacking the limits of more than one uninsured motorist coverage policy as provided in this section, if such provisions are included in a single policy covering multiple vehicles or in multiple policies issued by one insurer or an affiliated insurer, under common ownership or management, to an insured or to a resident relative of such insured. . . . For purposes of this subsection (2), underinsured motorist coverage is included in the term "uninsured motorist coverage" pursuant to subsection (4) of this section.
However, the General Assembly provided for an exception. The 1992 amendment, at CRS § 10-4-609(2), states that
[s]uch provisions shall not prohibit stacking of the uninsured or underinsured portions of a policy issued to an insured and a separate policy covering the insured which was not issued to the insured or a resident relative.
This exception apparently...
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