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.