Streff v. State Farm Mutual Automobile Insurance Co.

S.D. Codified Laws 58-11-9.4, which requires underinsured motorist (UIM) coverage in motor vehicle liability policies of insurance, does not limit UIM coverage to primary insurance policies and contemplates additional UIM coverage. Therefore, umbrella policies that include UIM coverage are subject to the same public policy prohibition invalidating an exception from coverage for accidents involving government owned vehicles.Plaintiffs purchased a motor vehicle liability policy from one insurer and a personal liability umbrella policy from a separate but related insurer. Both policies provided UIM coverage but both excluded coverage for accounts caused by government vehicles. When one of the plaintiffs was injured in an accident involving a government vehicle, Plaintiffs filed this declaratory action to determine the enforceability of the government vehicle exclusion in both policies. The circuit court determined that the exclusion was not enforceable in the motor vehicle liability policy but was enforceable in the umbrella policy. The Supreme Court reversed, holding that the circuit court erred in upholding the government vehicle exclusion in the umbrella policy. View "Streff v. State Farm Mutual Automobile Insurance Co." on Justia Law