Amid efforts by insureds and a few recent decisions by the Missouri Court of Appeals refusing to enforce so-called “limits-to-limits” definitions in underinsured motorist cases, the Eight Circuit has dealt another blow on the side of insurers. The federal appellate court affirmed on March 16, 2017 the district court’s summary judgment in favor of AMCO Insurance Company. This decision came two days after the Supreme Court of Missouri likewise enforced limits-to-limits definition of “underinsured motor vehicle” in Swadley v. Shelter Mut. Ins. Co., although the timing resulted in Swadley not being cited by the Eighth Circuit.
AMCO’s definition provided that an underinsured motor vehicle was “a land motor vehicle or trailer of any type to which a bodily injury liability bond or policy applies at the time of the accident but its limit for bodily injury liability is less than the limit of liability for this coverage.” This definition, which calls for the tortfeasor’s liability coverage limit to be compared to the UIM limit, can be contrasted from other definitions rendering a vehicle underinsured if the tortfeasor’s coverage is merely less than the insured’s total damages. The court determined that policy’s definition was clear and unambiguous and that no UIM coverage was available because the tortfeasor in the case before it had coverage greater than the limit of UIM coverage in the AMCO policy.
The insureds made the argument seen more and more recently that the policy’s otherwise clear terms were ambiguous because they conflicted with the declarations page, which listed a coverage limit of $100,000 with no other limitations or exclusions. The court aptly rejected that argument because it sought to read the declarations in isolation rather than interpreting the policy as a whole as required by Missouri law. Further, rejecting another ambiguity argument by the insureds, the court distinguished between policy provisions regarding the amount of coverage due once coverage has been triggered and those governing whether the policy affords coverage in the first place, finding that any ambiguity as to the former is immaterial to the latter.