Policy Language Prohibiting UIM Plaintiff From Receiving
Facts: The plaintiff was injured in an automobile accident and collected $5,000 in medical payment benefits under his automobile policy issued by the defendant, Hanover Insurance. After obtaining the $25,000 limit of liability from the tortfeasor’s insurer, the plaintiff pursued a claim for underinsured motorist benefits against Hanover.
Through arbitration the plaintiff’s damages were determined to be $52,000. After deducting the $25,000 which he had already received from the tortfeasor, the plaintiff sought $27,500 from Hanover.
Hanover claimed that it was entitled under the terms of its policy to deduct the $5,000 which it had paid in medical payments, and therefore was responsible for only $22,500 in underinsured motorist benefits. Hanover relied on a policy provision precluding the insured from receiving duplicate payments for the same element of loss under the medical payments coverage and uninsured motorist coverage provisions of the policy.
The plaintiff brought suit to recover the remaining $5,000 under the underinsured motorist provisions of its policy. The plaintiff acknowledged that the policy provisions upon which Hanover relied purported to prohibit him from recovering both $5,000 under the medical payments coverage and $5,000 for the same injury under the underinsured motorist provisions, but argued that the policy provision violated New Hampshire law.
The trial court ruled that the policy provision upon which Hanover relied was statutorily invalid under RSA 264:15, I, and Hanover appealed.
Held: Affirmed. RSA 264:15, I, provides that when an insured purchases liability insurance in an amount greater than the minimum coverage required by law, his uninsured motorist coverage will automatically be equal to the amount of liability coverage. This statute was enacted to enable policyholders to protect themselves against injury caused by uninsured motorists to the same extent they protect themselves against liability.
In Bertolami v. Merchants Mut. Ins. Co., 120 N.H. 308 (1980), the Court previously held that a policy provision authorizing the insurer to deduct medical payments made from the amount of uninsured motorist benefits payable under the policy was invalid under the predecessor statute to RSA 264:15, I because it created an inequality between insureds claiming uninsured motorist benefits and those entitled to make a claim under the policy’s liability coverage.
Hanover attempted to distinguish Bertolami by arguing that its policy, which also allowed deduction of medical payments benefits from liability coverage, did not result in any inequality between liability and uninsured motorist claims and, therefore, did not violate RSA 264:15, I.
The Court rejected this argument, ruling that the provision prohibiting duplicate recovery for medical payments and liability coverage violated RSA 264:17, which prohibits subrogation in favor of an insurer that has paid the insured’s medical costs under coverage pursuant to RSA 264:16. Since the provision prohibiting duplicate recovery for medical payments and liability coverage is void, the provision prohibiting duplicate recovery for medical payments and uninsured motorist benefits is also void because it would create an inequity prohibited under the policy set forth in RSA 264:15, I.
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