Division One of the Arizona Court of Appeals decided on May 22nd that an insurer and its wholly owned subsidiary both provided underinsured motorist coverage to their insured under separate policies issued by each company.
Hanfelder was injured in a motor vehicle accident. He collected the liability coverage limits from the responsible driver’s insurer and the UIM coverage limits from his insurer, GEICO Casualty. He also presented a UIM claim under a motorcycle policy issued by GEICO Indemnity Co, a wholly owned subsidiary of GEICO Casualty. GEICO Indemnity denied the claim based upon the Limits of Liability provision of its motorcycle policy which limits coverage to only a single policy of “…separate policies or coverages with us…”
Arizona law permits an insurer to limit UIM coverage to a single policy if several policies are issued by an insurer, even if those policies are issued by different companies, as long as the companies are “within a group of insurers under a common management.” So, GEICO could have limited UIM coverage to a single policy…but it didn’t. The court found that, when viewed in the context of the broader policy language, the word “us” in the phrase “coverages with us,” referred only to GEICO Indemnity. Any other construction “defies common sense.”
Hanfelder v. GEICO Indemnity Company, 2018 WL 2315949
