Michigan Court of Appeals; Docket No. 113883; Published
Judges Reilly, Cynar, and T.M. Burns; Unanimous
Official Michigan Reporter Citation: 182 Mich App 375; Link to Opinion 
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Private Contract (Meaning and Intent)
Underinsured Motorist Coverage: Underinsured Motorist Coverage in General
Underinsured Motorist Coverage: Setoffs Applicable to Underinsured Motorist Cases
Uninsured Motorist Benefits: Uninsured Motorist Coverage in General
CASE SUMMARY:
In this unanimous Opinion by Judge Reilly, the Court of Appeals found Auto Owners' insurance policy ambiguous with respect to the language of its uninsured and underinsured motorist coverages, and allowed defendant's decedent to recover from both coverages simultaneously.
In this unique case of apparent first impression, the defendant's decedent claimed benefits under both the uninsured and underinsured coverages of Auto Owners' insurance policy. Defendant's decedent was killed while riding as a passenger in a car which was drag racing with another vehicle. The driver of the car in which decedent was riding was underinsured, and the driver of the second car was uninsured. After receiving partial recovery from the insurance on the driver of the underinsured Vehicle, a claim was made against Auto Owners for both uninsured and underinsured motorist coverage. The limits of each type of coverage was $50,000 per person and $100,000 per occurrence. It was undisputed that a separate premium was paid for each type of coverage.
Auto Owners claimed that the underinsured coverage was merely an extension of uninsured coverage and was intended only to provide coverage in a broader range of circumstances, and not to increase the limits of liability. Auto Owners claimed that its "limits of liability" clause limited recovery to $50,000. Auto Owners also claimed that the language of its policy providing underinsured benefits supported its contention that underinsured coverage was merely an extension of uninsured coverage. In reversing the trial court's entry of summary disposition in favor of Auto Owners, the Court of Appeals found that the policy at issue was ambiguous as to whether an insured may maintain simultaneous claims for maximum benefits under both the uninsured and underinsured motorist provisions. The term "extension" was not defined in the policy, and there was nothing in the policy to indicate that the use of that term precluded simultaneous maximum coverage under both uninsured and underinsured provisions. Insurance contracts are to be interpreted by reading them as a whole, and if the contract can reasonably be understood in different ways, any ambiguity is to be liberally construed against the insurer and in favor of coverage. Exclusionary clauses are to be strictly construed against the insurer.