Chapter 2 - § 2.6 • WHO IS AN "UNINSURED MOTORIST" FOR PURPOSES OF UM COVERAGE — HIT-AND-RUN ACCIDENTS

• Jurisdiction: Colorado

§ 2.6 • WHO IS AN "UNINSURED MOTORIST" FOR PURPOSES OF UM COVERAGE — HIT-AND-RUN ACCIDENTS

§ 2.6.1—Requirement of Physical Contact Between Hit-And-Run Vehicle and Insured Vehicle Is an Impermissible Restriction of Statutorily Required Coverage

Where insured was involved in a motor vehicle accident after unidentified motorist pulled into his lane and caused him to swerve and strike a guard rail and another vehicle, insured was entitled to recover uninsured motorist benefits from his own insurer. Policy provision that limited coverage for accident caused by hit-and-run motorists to situations in which there was physical contact between the hit-and-run vehicle and the vehicle in which the insured was riding was an impermissible restriction on statutorily required uninsured motorist coverage and was unenforceable. Farmers Insurance Exchange v. McDermott, 527 P.2d 918 (Colo. App. 1974).

Farmers Insurance Exchange v. McDermott, 527 P.2d 918 (Colo. App. 1974), involved a dispute over uninsured motorist coverage for an accident caused by an unidentified vehicle. Paul McDermott had an automobile insurance policy issued by Farmers Insurance Exchange, which included uninsured motorist coverage. The policy included coverage for bodily injury caused by hit-and-run vehicles. However, the policy defined a hit-and-run vehicle as a "'motor vehicle which causes bodily injury arising out of physical contact of such motor vehicle with the insured or with an automobile which the insured is occupying at the time of the accident . . . .'" Id. at 919. In addition, for coverage to apply, the identity of the owner or operator of the vehicle had to be unknown.

McDermott was injured in an accident that occurred after a vehicle driven by an unidentified driver pulled into his lane, causing his vehicle to swerve, strike a guard rail, and then hit another vehicle. There was no physical contact between the unidentified vehicle and McDermott's vehicle. When McDermott sought UM coverage for his injuries, Farmers denied coverage and filed a declaratory judgment action, seeking a declaration that it was not obliged to pay UM benefits. The trial court entered judgment in favor of Farmers, but the court of appeals reversed.

The court of appeals agreed with McDermott's argument that the physical contact requirement in Farmers' policy constituted an impermissible restriction on the coverage required by Colorado's uninsured motorist statute. That statute, which was codified at the time as C.R.S. § 72-12-20 (1965 Perm. Supp.), included language similar to that contained in the present version of the statute, C.R.S. § 10-4-609(1). The legislative declaration of public policy accompanying this statute indicated that its purpose was to provide the public with insurance protection from harm caused by negligent, financially irresponsible motorists. 527 P.2d at 919.

The court of appeals recognized that in some jurisdictions the physical contact requirement has been upheld. However, in several states with statutes similar to Colorado's, courts have held that the physical contact requirement is inconsistent with public policy. Where the physical contact requirement has been upheld, courts have reasoned that the purpose of uninsured motorist coverage is only to provide protection from damages caused by motorists who actually have no insurance coverage. These courts have reasoned that there is no presumption of lack of coverage where the negligent driver remains unidentified.

The court of appeals found this line of reasoning unpersuasive. Instead, the court concluded that "the key to the application of the uninsured motorist statute is the inability of the innocent injured party to recover for a loss caused by another's negligence, whether that person is known or unknown." Id. at 920. Bearing in mind the legislature's declaration of public policy, the court concluded that the uninsured motorist statute "does require coverage for hit-and-run drivers." Id. Having determined that coverage is required for hit-and-run accidents, the court of appeals next determined that the physical contact requirement is an impermissible limitation upon UM coverage. The court noted that the physical contact limitation does not appear in the statute and held that it was impermissible in light of the broad coverage required by the statute. Id.

§ 2.6.2—Driver Who Withholds or Falsifies Information May Be Considered Hit-And-Run Motorist

An insured is entitled to UM benefits under provisions of an automobile insurance policy defining an uninsured motor vehicle as a hit-and-run vehicle whose owner or operator has not been identified, if the insured can establish that the other driver purposefully withheld his or her identification or gave false information. White v. Farmers Insurance Exchange, 946 P.2d 598 (Colo. App. 1997).

In White v. Farmers Insurance Exchange, 946 P.2d 598 (Colo. App. 1997), the plaintiff, Susan White, brought a declaratory judgment action against her automobile insurer, Farmers Insurance Exchange, seeking a declaration that she was entitled to UM coverage. White was involved in an accident with a pickup truck. She and the driver of the pickup exchanged information at the scene, including insurance information. While at the scene of the accident, White dropped a piece of paper containing the other driver's information, and he helped her pick it up. When she looked for the paper later, she couldn't find it, and she believed the other driver had taken it from her. White also filled out a police report, describing the other vehicle and reporting the fact that it was insured by State Farm. However, White was never able to locate the other driver. White then presented a claim for UM benefits to Farmers, which denied coverage. In the declaratory judgment action, the trial court granted summary judgment in favor of White, ruling that she was entitled to UM benefits. Farmers appealed, arguing that summary judgment was improper because there were disputed issues of material fact. The court of appeals agreed with Farmers and reversed the judgment in favor of White.

The Farmers policy provided that the company was obligated to pay UM benefits for all sums an insured was legally entitled to collect from the owner or driver of an uninsured motor vehicle. The policy definition of the term "uninsured motor vehicle" included "'a hit-and-run vehicle whose operator or owner has not been identified and which strikes . . . your insured car.'" Id. at 599. The parties agreed that White had the burden of proving that she was involved in an accident with a hit-and-run motorist.

The court of appeals noted that the issue presented in this case was one of first impression in Colorado. However, the court recognized that "courts in other jurisdictions have held that, when a driver purposefully withholds his or her identification or gives false information, UM benefits are available." Id. The court agreed with this reasoning and held that "when an allegedly uninsured driver prevents the insured from obtaining information concerning his or her identification, UM benefits are available." Id.

However, the court held that the trial court erred in granting summary judgment in favor of White because there was a question of fact as to whether the driver of the pickup had purposefully taken the piece of paper containing information about his identity and insurance coverage. Id. Therefore, the court remanded the case for further proceedings in the trial court.

§ 2.6.3—Motorist Who Has Liability Coverage, but Who Cannot Be Located for Service of Process, Is Not an Uninsured Motorist

Where insured was injured in an automobile accident and filed suit against tortfeasor, but insured was unable to obtain service of process for two and a half years, and insured then brought claim against her own insurance company for uninsured motorist benefits, tortfeasor was not an uninsured motorist and insured was not entitled to UM benefits. A person pursuing a claim for UM benefits bears the burden of proving the accident involved an uninsured motorist. Difficulty in obtaining service of process is not equivalent to not knowing the identity of the other driver. Claire v. State Farm Mutual Automobile Insurance Co., 973 P.2d 686 (Colo. App. 1998).

In Claire v. State Farm Mutual Automobile Insurance Co., 973 P.2d 686 (Colo. App. 1998), the court addressed the issue of whether the plaintiff, Elly Claire, was entitled to uninsured motorist benefits from State Farm, her automobile insurer, because she could not obtain service of process upon the driver of a car that had rear-ended her vehicle several years earlier. The court of appeals affirmed the trial court's decision, holding that Claire was not entitled to UM benefits in these circumstances.

Claire was injured in an automobile accident on February 12, 1991. The other driver, Mark Mahna, was insured by USAA, and the parties exchanged information at the scene and filed a police report. From 1991 to 1993, Claire's attorney and an attorney retained by USAA to represent Mahna tried to resolve Claire's claim, but negotiations were unsuccessful. After suit was filed, Claire's attempts to serve process on Mahna for the next two and a half years were futile. Claire then sought UM benefits from State Farm. However, because it did not agree that Mahna was uninsured, State Farm rejected the claim and refused to arbitrate. Claire then filed a declaratory judgment action seeking a determination that she was entitled to UM benefits.

The court of appeals noted that the uninsured motorist statute, C.R.S. § 10-4-609(1), does not define the term "uninsured motor vehicle" or "uninsured motorist." However, the court of appeals noted that in State Farm Mutual Automobile Insurance Co. v. Nissen, 835 P.2d 537 (Colo. App. 1992), aff'd, 851 P.2d 165 (Colo. 1993), a division of the court of appeals "determined that an 'uninsured automobile' is one that has no applicable insurance under the facts...