Gambrell v. IDS Property Cas. Ins. Co., __Ariz. Adv. Rep. __, 2CA-CV 2014-0147 (App. Div. II, September 9, 2015) (J. Miller)

WHERE INSURER CLEARLY STATES THAT UIM COVERAGE IN A PERSONAL AUTO POLICY DOES NOT APPLY WHEN THE INSURED IS OCCUPYING A COMMERCIAL VEHICLE ARS § 20-259.01 (C) REQUIRES A FINDING OF NO COVERAGE

Plaintiff was injured in the course and scope of his employment while driving a milk truck. He recovered the $15,000 policy limits from the adverse driver and $100,000 from his employer's Underinsured Motorist coverage [UIM]. He then sought to collect an additional $100,000 under his personal auto policy UIM coverage. IDS, his carrier, denied the claim, he sued for breach of contract and bad faith and IDS moved for summary judgment based upon its policy language which required he be in a “private passenger” vehicle to collect. The trial court granted the motion, and denied a subsequent motion for new trial and the Arizona Court of Appeals affirmed.

 A.R.S.§ 20-259.01 (C) provides: Any  insurer  writing  automobile  liability  or motor  vehicle  liability  policies  may  make available     the     coverages     required     by subsections   A   and   B   of   this   section   to owners  and  operators  of  motor  vehicles that     are     used     as     public     or     livery conveyances or rented  to others  or that  are used  in  the  business  primarily  to  transport property or equipment.

 Arizona courts have repeatedly found that this section is permissive. An insurer providing personal automobile insurance “may” offer coverage when the insured is using a vehicle “in the business primarily to transport property or equipment,” but is not required to. While generally speaking, UIM coverage is portable and follows the insured in wherever he is when injured by an underinsured auto, A.R.S.§ 20-259.01 (C) creates an exception to that rule.  Here the policy language was clear and unambiguous and IDS did not provide UIM coverage for plaintiff's accident.