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Justices rule on uninsured motorist statute

May 14, 2009

In an issue of first impression, the Indiana Supreme Court had to decide whether an insurance company's uninsured motorist policy - which requires the bodily injury be sustained by an insured - violates the state's uninsured motorist statute and is unenforceable. The high court unanimously affirmed summary judgment Wednesday in favor of the insurance company, ruling Indiana Code clearly defines uninsured motorist coverage only for an insured's bodily injury.

In Maggie and Leonard Bush v. State Farm Mutual Automobile Insurance Co., No. 71S03-0810-CV-558, Maggie and Leonard Bush sued State Farm, their insurer, following the death of their adult son in a car accident in which he was a passenger. The Bushes claimed they sustained damages arising out of the conduct of an uninsured motorist and the insurer's failure to provide uninsured motorist benefits was a breach of the insurance contract. State Farm denied coverage because their son didn't live with his parents at the time of the accident and wasn't considered an "insured" under their policy.

The trial court granted summary judgment to State Farm because it ruled their son wasn't covered by the policy because he didn't meet the policy's definition of "relative" and wasn't an insured. The trial court didn't address the Bushes' argument that the company's policy violated the uninsured motorist statute, Indiana Code Section 27-7-5-2.

The Indiana Court of Appeals reversed, finding the exclusion of coverage for the son violated Indiana statute.

The Supreme Court examined the uninsured motorist statute, which clearly defines uninsured motorist coverage only for the "insured's" bodily injury, and ruled State Farm's policy is consistent with the statute by requiring the insured sustain bodily injury to trigger uninsured motorist coverage, wrote Justice Theodore Boehm.

In addition, the high court's ruling is supported by caselaw, including Ivey v. Massachusetts Bay Insurance Co., 569 N.E.2d 692, 693 (Ind. Ct. App. 1991), and Armstrong v. Federated Mutual Insurance Co., 785 N.E.2d 284, 293 (Ind. Ct. App. 2003).

Bodily injury to an insured doesn't cover emotional distress, unless it arises out of bodily touching, which isn't the case here, so the Bushes can't recover under that theory.

Even though this is an issue of first impression here, other states have interpreted their statutes to require injury be sustained by an insured.

"In short, the clear weight of authority from other jurisdictions supports our conclusion that Indiana's uninsured motorist statute requires coverage only for bodily injuries sustained by an insured," wrote Justice Boehm.

Justice Boehm also noted that the couple, in their individual capacities, aren't "legally entitled to recover" damages for their son's death; an Adult Wrongful Death Act claim would have to be filed by the estate.

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