Rashid v. State Farm Mutual Automobile Insurance Co
In Rashid v. State Farm Mutual Automobile Insurance Co., 163 Ariz. 270, 271, 276, 787 P.2d 1066, 1067, 1072 (1990), the court invalidated a policy's other insurance escape clause for excess coverage that would have permitted the plaintiff passenger's insurer to avoid paying an uninsured motorist claim because another insurer for the host vehicle had already paid uninsured motorist coverage benefits in an amount equal to or greater than the passenger's uninsured motorist coverage limit.
The court stated the statute did not "permit an insurer to set a different policy limit by eliminating or reducing recovery below actual damages simply because another policy fortuitously also provides some coverage." Id.
The court noted that, when "a premium has been paid for each of the coverages and the insurance policy has been issued," recovery is permitted "under more than one coverage until the claimant is fully indemnified." Id. at 273, 787 P.2d at 1069.
The court in Rashid qualified its holding, stating, "Because State Farm's escape provision removes that which the statute requires to be in the policy, we hold the escape clause cannot be applied when the insured is not fully indemnified." Id. at 275, 787 P.2d at 1071.