Indiana Court of Appeals Determines That Named Insured Cannot Recover Uninsured Motorist Coverage While Riding as a Passenger in His Own Vehicle

Michael R. Giordano

2018 WL 4905966 (Ind. Ct. App. 2018)

Smith possessed an insurance policy with Progressive for his pick-up truck. Smith and a friend, Clayton, attended an event together. Upon leaving, Smith gave Clayton permission to drive Smith’s pick-up truck. Clayton lost control of the truck resulting in serious personal injuries to Smith. No other vehicles were involved in the accident.

Smith submitted a claim to Progressive to recover for property damage, medical payments, and uninsured motorist (“UM”) coverage. Progressive paid Smith for his property damage and issued medical payments of $5,000. Smith also brought a negligence lawsuit against Clayton, and his personal liability insurer settled with Smith. (The opinion does not explain why Smith sought UM coverage despite Clayton having liability insurance).

Progressive filed a declaratory judgment complaint requesting a court determination that Smith was not entitled to UM coverage under its policy. Smith filed a motion for summary judgment which Progressive opposed as well as filing its own cross-motion. The court, without a hearing, granted summary judgment to Smith and against Progressive finding that Smith was entitled to UM coverage.

Progressive contended that under the plain terms of its policy, Smith could not recover UM benefits. The Progressive policy provided that UM coverage was available if the purported negligent operator met the definition of driving an “uninsured motor vehicle.” The policy defined “uninsured motor vehicle” as follows:

An “uninsured motor vehicle” does not included any vehicle or equipment:

  • a.Owned by [the named insured], a relative, or a rated resident or furnished or available for the regular use of [the named insured], a relative or rated resident; . . .
  • g.that is a covered auto.

Progressive contended that because Clayton was operating a vehicle that was owned by Smith, the named insured, and the vehicle was also covered under the Progressive policy, the definition of “uninsured motor vehicle” was not met.

The appellate court found that the above-referenced language was unambiguous in stating that UM coverage was unavailable to Smith for injuries sustained in an accident involving his own, covered vehicle. The court concluded that such language restricting UM coverage, did not offend Indiana’s public policy or Indiana’s Financial Responsibility Act.

The Court also rejected Smith’s attempt to argue that an ambiguity existed based upon his reference to an exception to a policy exclusion. The court specifically found that an exception to an exclusion cannot create coverage where no coverage originally existed.

The court’s analysis appears to show the correct application of policy language that restricted coverage. The policy language clearly limited coverage and the court found that such limitations did not offend public policy.