Auto Policy Not Considered As Providing Excess Coverage Over Another Auto Policy Where “Other Insurance” Clauses Conflict

A California appellate court recently held that absent inclusion of exclusionary language authorized by California’s underinsured motorist statute, an auto liability insurer could not rely on its “other insurance” clause to support the position its policy provided excess coverage.

According to the Aug. 12 opinion in Progressive Choice Insurance Co. v. California State Automobile Association Inter-Insurance Bureau, Benjamin White was injured in a traffic collision while riding as a passenger in a vehicle operated by Scott Tortora. The third party who caused the collision was underinsured. White was insured under two automobile insurance policies.

The first policy was issued by Progressive to Tortora and covered Tortora’s vehicle. The Progressive policy provided underinsured motorist (UIM) bodily injury coverage with limits of $100,000 per person. The second policy was issued by the California State Automobile Association (CSAA) to White as the named insured. The CSAA policy provided UIM bodily injury coverage with limits of $50,000 per person.

White settled with the at-fault driver’s auto insurer for the limit under that policy of $25,000. White then made a claim for UIM benefits under the Progressive and CSAA policies. CSAA denied coverage. Progressive paid the sum of $62,500 to White. Progressive then demanded that CSAA reimburse Progressive $20,833.33, the pro-rata share of the payment made to White. CSAA denied any obligation to reimburse Progressive.

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