From the desk of Kyle Riley: Occasionally, two insurance policies will provide coverage to one person following a car accident. This creates a problem when both policies purport to be excess to the other, and neither wants to pay as the primary insurer. When these clauses collide, who is liable to the insured?
Claims Pointer: When two insurance policies both provide coverage to one insured following an accident, and both policies have excess coverage clauses at the same coverage level, those clauses cancel each other out and both insurers are liable for a pro rata share of the judgment.
Safeco Insurance Company of Illinois v. Country Mutual Insurance Company, in the Court of Appeals of the State of Washington (Case No. 65924-3-I, October 24, 2011).
Jonathan Kooistra was in a car accident while driving a car other than his own with the permission of the car’s owners. Kooistra was insured by Country Mutual Insurance Company, and the car’s owners were insured by Safeco Insurance Company of Illinois. Kooistra’s policy provided him with coverage when he drove non-owned vehicles, and the other policy provided coverage to anyone using the vehicle with permission. As such, the accident gave rise to potential coverage to Kooistra under both policies. After the accident, Safeco made a liability payment for property damage. Country Mutual refused to share the costs. Safeco then sued Country Mutual for contribution. Both parties moved for summary judgment, and the trial court dismissed the case, finding Country Mutual’s policy was excess to Safeco’s policy. Safeco appealed to the court of appeals.
On appeal, Safeco argued that both insurance policies had “other insurance” clauses that made one policy excess over the other, thus each clause should be disregarded and each insurer should pay a pro rata share of the amount owed. Country Mutual disagreed, and argued that Safeco’s policy was primary and not at the same level as Country Mutual’s, thus making Country Mutual’s policy excess and exempting it from liability for the loss. The Court of Appeals agreed with Safeco, and after review of both policies held that each had “other insurance” clauses at the same coverage level (i.e. both were primary, and neither was an excess policy). The Court found that when two policies have these clauses at the same level, they are generally disregarded as mutually repugnant, rendering each insurer liable for a pro rata share of the judgment. As Country Mutual and Safeco’s policies cancelled each other out, the Court held Country Mutual was liable to Safeco for its pro rata share, and the case was reversed and remanded.
NOTE: This opinion has not been published. It is provided to demonstrate how the court approaches the issues involved in the case. It cannot be cited as authority to a court of law.
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