Thomas v. Nationwide Mut. Ins. Co

In Thomas v. Nationwide Mut. Ins. Co., 188 W.Va. 640, 425 S.E.2d 595 (1992), Deborah Thomas was riding with her husband when he went off the road and struck a utility pole at a high rate of speed. Ms. Thomas sustained multiple fractures to her hips and legs which resulted in permanent impairment. The Thomases owned two vehicles which were insured under a single insurance policy. The vehicles carried liability and UIM limits of $ 100,000/$ 300,000 each. The insurance company paid the full $ 100,000 liability coverage but denied UIM coverage. Ms. Thomas filed a declaratory judgment action in circuit court to determine the rights and obligations of the parties. The circuit court certified questions to the Court. The primary question addressed by the Thomas Court reads as follows: 3. Whether in the instant case the following definitional exclusion (known as the Family Use Exclusion) is a valid exclusion in light of the current law and public policy of the State of West Virginia? '2. We will not consider as an underinsured motor vehicle: (e) any vehicle owned by or furnished for the regular use of you or a relative.' (Id., 188 W.Va. at 642, 425 S.E.2d at 597.) After discussing applicable case law, the Court reasoned that: "Because recovery by a plaintiff of underinsured motorist benefits is dependent on the existence of two policies, the tortfeasor's and the plaintiff insured's, when a tortfeasor is underinsured, the plaintiff insured normally recovers third-party liability benefits from the tortfeasor's insurance coverage and supplements this recovery, if necessary, with underinsured motorist benefits through his or her own insurance. A family use exclusion, which excludes from the definition of "underinsured motor vehicle" any vehicle owned by or furnished for the regular use of the insured or a relative, or in like terms, has the purpose of preventing underinsured coverage from being converted into additional liability coverage, because when the exclusion is applied, it is the liability coverage that has been paid for by the insured, and not underinsured coverage. Therefore, such an exclusion would not violate the public policy of full compensation of an insured." (Id., 188 W.Va. at 645, 425 S.E.2d at 600.)