The Supreme Court of Appeals of West Virginia determined that a driver who suffered property damage at the hands of an uninsured motorist is entitled to recover the minimum amount required by statute for the property he was towing at the time of the collision. The case is Erie Ins. Co. v. Dolly, 811 S.E.2d 875 (W. Va. 2018).
What Happened
Mr. Dolly was using his truck to tow an ATV on a trailer when another driver collided with him. The other driver, who was found at-fault, was uninsured. Dolly himself walked away unscathed, but his truck, ATV, and trailer weren’t so fortunate; all three were deemed total losses. The case between Dolly and the other driver ended in a settlement.
Dolly sought coverage from his own auto carrier, Erie Insurance Co., who issued a $10,000 payment for Dolly’s truck in accordance with the property damage part of Dolly’s policy. But Erie refused UM coverage for both the ATV and the trailer based on policy exclusions.
Litigation
Dolly sought declaratory judgment that Erie was obligated to cover his ATV and his trailer. Erie filed a competing motion for declaratory judgment that the policy exclusions barred UM coverage for Dolly’s ATV and trailer. The trial court determined that, even though Erie was not required to pay more than the statutory minimum of $10,000, the company was nevertheless obligated to pay UM coverage for the ATV and trailer up to that minimum. The judges ordered Erie to pay Dolly $10,000 in UM coverage for his trailer and ATV. Erie appealed.
Imgrund and Statutory Minimums
Dolly argued that Erie’s denial of his claim for damages ran afoul of state law. Under W. Va. Code §33-6-31(b), it states that an auto policy “shall provide an option to the insured with appropriately adjusted premiums to pay the insured all sums which he shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle.” (emphasis added).
This language served as the basis for the trial court’s ruling in Dolly’s favor. Dolly was “legally entitled to recover” from the uninsured, at-fault driver for the loss of his ATV and trailer. Therefore, under W. Va. Code §33-6-31(b), he was entitled to payment from Erie. Though Erie was entitled to exclude anything over the statutory minimum, the insurer could not exclude the actual statutory minimum.
The justices examined a similar case, Imgrund v. Yarborough, 483 S.E.2d 533 (W. Va. 1997), as part of their analysis. The Imgrund court was confronted by a person whose insurer refused to provide UM coverage because the person was driving a vehicle not listed on the declarations page at the time of injury. The exclusion was deemed “void and ineffective” because it attempted to exclude all UM coverage for “owned but not insured” vehicles. State law required a certain amount of coverage for owned autos, and the insurer legally could not offer less coverage than was required by that law. The justices did say, however, that insurers were free to preclude coverage in excess of the statutory minimum.
The court in the present case found Imgrund persuasive. Though the exclusion at issue in the present case concerned an exclusion for property damage, rather than an “owned but not insured” exclusion, the reasoning was the same. The statutory minimum was the starting point for coverage; if an insured purchased UM coverage, then that insured would be entitled to receive the statutory minimum when UM coverage was triggered. Anything more than the minimum was, as the saying goes, a cherry on top, which Erie was not required to provide.
Boniey and Uninsured Motor Vehicles
Erie, however, cited Boniey v. Kuchinski, 677 S.E.2d 922 (W. Va. 1986), which held that it was not impermissible for an auto insurer to exclude UM coverage for ATVs. In Boniey, a woman was injured while riding an ATV driven and owned by her friend. She sought UM coverage from both her friend’s auto carrier and her own. The claim was denied both times based on policy provisions excluding UM coverage for ATVs. The question of whether an ATV qualified as an “uninsured motor vehicle” for purposes of UM coverage reached the Supreme Court of Appeals of West Virginia. If the answer was “yes,” the ATV exclusion was void because it excluded coverage that was required by law. Otherwise, the exclusion would stand.
The justices determined that an ATV, for UM coverage purposes, was not legally a “motor vehicle” because ATVs are “expressly exempt from vehicle registration requirements.” Therefore, it was impossible for an ATV to be an “uninsured motor vehicle,” so the UM exclusion for ATVs was valid and enforceable.
The comparison, unfortunately, was inapposite to Erie’s denial of Dolly’s claim. Unlike the issue at the heart of Boniey, the “uninsured vehicle” status of the other driver’s auto in this case was never in question–the driver who struck Dolly admitted she had been driving an uninsured auto as part of the settlement agreement. Erie had not and did not contest this fact. Neither was there a question of whether Dolly was legally entitled to recoup damages from the other driver, since there was no debate over her liability for the destruction of Dolly’s property. Erie had even approved their settlement agreement. It was immaterial that Dolly’s ATV was on his trailer at the time of the collision.
Conclusion
The justices agreed with the trial court. Even though Dolly couldn’t receive more than the statutory minimum for the damages to his trailer and his ATV, he was still entitled to receive the minimum coverage required by law. The judgment of the trial court was affirmed.
Editor’s Note: It is important to note that Dolly was only entitled to, and actually only seeking, the statutory minimum for UM coverage on his ATV and trailer. He wasn’t angling to recover more than was allowed, or even seeking coverage he had not purchased. When he purchased his policy from Erie, he opted in for UM coverage. As soon as that coverage was triggered–when he was struck by a driver who had no auto insurance–he was entitled to receive the minimum required payment for his damaged property.