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Pro Rata Liability Insurance Of Car Accident

In Elrod v. General Casualty Co. of Wisconsin, 1997 SD 90, 566 N.W.2d 482, we indicated the excess amount of UIM insurer's exposure in this situation.

Elrod involved a two-vehicle accident where Thompson, the driver and owner of the vehicle, and Elrod, a passenger in Thompson's vehicle, sustained injuries when Haas negligently collided with them.

After an inadequate recovery from Haas' liability insurer, Thompson and Elrod sought UIM benefits from their respective carriers. The trial court held that Elrod's carrier, DeSmet, was the excess UIM carrier.

Thompson's carrier, Great Casualty, was deemed the primary UIM carrier and it appealed. The parties agreed that Elrod's UIM carrier, DeSmet, had no UIM liability to Thompson, the owner of the vehicle. This court, in a unanimous opinion, noted:

If General Casualty is determined to be the primary insurer for Elrod and DeSmet is determined to be Elrod's secondary UIM insurer, then DeSmet would have no UIM liability to Elrod because the maximum coverage to Elrod would be covered by General Casualty's UIM policy limits.

In Elrod, an automobile owned and driven by Thompson and occupied by Elrod, collided with Haas. See 1997 SD 90, 566 N.W.2d 482.

Thompson and Elrod, who were injured in the collision, settled with Haas' liability insurer.

Thompson was insured by General Casualty with UIM limits of $ 100,000 and $ 300,000. Elrod had UIM coverage with DeSmet Insurance Company with policy limits of $ 100,000 and $ 300,000.

Both Elrod and Thompson initiated an action against "their" respective insurers to determine UIM benefits owed.

The issue before this Court on appeal was whether the insurance companies share the liability pro rata or whether one insurer is determined to be the primary insurer and the other an excess insurer.

Before addressing the sole disputed issue, the majority noted:

We initially note that all of the parties involved in this action agree that DeSmet has no UIM liability to Thompson. If General Casualty is determined to be the primary insurer for Elrod and DeSmet is determined to be Elrod's secondary UIM insurer, then DeSmet would have no UIM liability to Elrod because the maximum coverage to Elrod would be covered by General Casualty's UIM policy limits. The only dispute involved here is General Casualty's contention that DeSmet should share General Casualty's UIM liability to Elrod on a pro rata basis.

See id. at 484 (noting SDCL 58-11-9.5 limits UIM coverage to "'the difference between the UIM policy limits less the amount paid by the liability insurer of the tortfeasor'").

Both the majority and American States contend that our initial discussion in Elrod should apply in this case to remove American States' exposure as an excess UIM carrier.

While the facts in Elrod are similar to the present case, Elrod is distinguishable. In Elrod, the parties agreed that DeSmet had no UIM liability to Thompson and the case involved an "other insurance" clause in both policies which provided that if other applicable similar insurance policies apply, the insurer will only pay their proportionate share of the loss. Id. at 483-84.

In Stanage, we addressed an insured attempting recovery from two of his own uninsured motorist policies. See 454 N.W.2d at 740.

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