Underinsurance
Setoffs-Auto

Third party may recover both UM and liability limits under insured's policy.
Jankowiak v. Allstate Property & Cas. Ins. Co.
No. 05-0072 (Tex. App. Aug. 8, 2006)

    The Texas Court of Appeals reversed a trial court's grant of summary judgment in favor of an auto insurer whose insured was sued by a third party who was injured while a passenger in the insured's car. The policy did not bar the third party from recovering both the liability policy limit and the uninsured motorist (UM) policy limit.

    On June 9, 2002, a car being driven by Daniel Dellasala Jr. was involved in an accident with Alejandra Salas, an uninsured driver. Dellasala's passenger, Laci Jankowiak, was injured in the accident. Jankowiak sued Salas, Dellasala and Dellasala's insurer, Allstate Property and Casualty Insurance Co., alleging fault on the part of both drivers and seeking UM benefits.

    Jankowiak settled with her own insurer for the UM policy limit and with Allstate for its policy's $25,000 liability limit. Claiming her actual damages exceeded her recovery under the settlements, Jankowiak sued Allstate, seeking its $25,000 UM policy limit. A trial court granted Allstate's motion for summary judgment, and Jankowiak appealed.

    Payment under liability provisions does not reduce entitlement under UM provision. The court of appeal noted Jankowiak's contention that the trial court erred in concluding that Jankowiak may recover either the UM coverage or under the liability coverage, but not both. Payments under the policy's UM coverage reduce any amount the insured is entitled to under the liability coverage. However, the policy does not conversely provide that payment under the liability provision will reduce the insured's entitlement to UM coverage.

    The court of appeal concluded that the policy's "maximum limit of liability" language did not reach outside the bounds of each separate coverage to limit other coverage within the policy. In addition, no other express provision limits UM coverage once liability limits are paid to one person for injuries sustained in one accident. Accordingly, the court of appeals reversed the trial court's grant of summary judgment to Allstate and remanded for further consistent proceedings.

Strafford Texas Insurance Law & Litigation Alert
September 15, 2006