Background
Bobby Ray Clayton was injured by an uninsured motorist while driving his motorcycle. He held two policies: a standard GEICO policy providing full portable uninsured motorist coverage and an adjunctive Essentia specialty policy covering only his antique 1965 Ford F-100. The Essentia policy excluded coverage for accidents involving vehicles other than the covered antique vehicle. Clayton sought uninsured motorist benefits from Essentia for the motorcycle accident, but Essentia denied the claim based on the policy terms. The district court granted summary judgment in part, limiting Essentia’s liability to the statutory minimum, and Essentia appealed.
The court’s reasoning
The court applied Alabama substantive law and predicted how the Alabama Supreme Court would rule. It found that Alabama Code Section thirty-two point seven point twenty-two subsection j allows the requirements for a motor vehicle liability policy to be fulfilled by one or more carriers. The court reasoned that the portable uninsured motorist coverage requirement is a mandate that may be satisfied through multiple policies working in tandem. The court noted that every state court to address this issue under similar laws has held that portable coverage may be satisfied by multiple policies. The court emphasized that Alabama public policy is satisfied as long as the insured has the required minimum coverage, regardless of which carrier provides it. Since Clayton had a separate GEICO policy providing the full twenty-five thousand dollars required by law, the Essentia policy exclusion was enforceable.
What it means going forward
Insurers offering specialty policies for antique or classic vehicles may enforce exclusions limiting uninsured motorist coverage to the covered vehicle, provided the insured maintains a separate standard policy that meets all state minimum requirements.