3.3.6 Nonduplication of Benefits Under Multiple UIM Policies

• Jurisdiction: Arizona

The Arizona courts have validated nonduplication of benefits clauses in the context of underinsured motorist coverage.^[220] In State Farm Mutual Automobile Insurance Co. v. Arrington,^[221]the court held that the insureds were not entitled to recover duplicate benefits under multiple underinsured motorist policies issued by the same insurance company where each insurance policy required the company to pay the "difference between" the amount of the insured's damages and the amount paid to the insured up to the UIM policy limits. The court in Arrington found that Arizona's public policy did not require that the insureds, who paid for underinsured motorist coverage under five separate policies issued by State Farm, were entitled to collect UIM benefits under each policy, if resorting to more than one policy was not necessary to compensate the insureds for their remaining damages after payment by the tortfeasor's liability insurance company. Once State Farm had paid fully the difference between its insured's damages for bodily injury and what the tortfeasor's insurance company had paid, there was no longer a "difference" between those amounts for which the insureds could be compensated under other policies.

In Arrington, State Farm issued several separate...