The Oklahoma Supreme Court recently upheld an important insurance coverage protection for consumers in a case involving uninsured/underinsured motorist (UM) benefits.
In Coates v. Progressive Direct Insurance Company, decided May 3rd, 2022, the Court ruled that a driver was entitled to UM benefits under his auto policy, even though he had rejected that coverage under his motorcycle policy. The key takeaway is that in Oklahoma, UM coverage follows the insured individual – not a particular vehicle.
Here’s what happened:
- John Coates had a motorcycle policy and a separate auto policy with Progressive Insurance.
- He declined UM coverage under his motorcycle policy but did purchase it under his auto policy.
- Coates was then injured in a motorcycle accident with an underinsured driver.
- Coates filed a claim with his insurance company seeking UM benefits under his policy.
- Progressive denied his claim for UM benefits under his auto policy because he was on his motorcycle (not his car).
- Coates filed a bad faith insurance claim, but the District Court granted summary judgment for Progressive, finding that the company had a legitimate dispute over coverage on the unsettled law regarding the policy exclusion.
On appeal, the Oklahoma Supreme Court said this denial violated Oklahoma public policy. Since Coates had purchased UM coverage, he was entitled to those benefits if injured, regardless of what vehicle he was in. An exclusion in his auto policy restricting UM coverage in this situation was invalid, as it prevented him from receiving coverage he had paid for. The Court also reversed summary judgment on the bad faith claim, finding the trial court should have allowed Coates time to conduct discovery on whether Progressive actually relied on the exclusion in denying the claim.
This upholds the principle that UM coverage protects the insured individual, not a particular vehicle. Oklahomans who take the responsible step of purchasing UM coverage can be confident they will be covered, even if injured while occupying a different vehicle. This protection should provide peace of mind to consumers who want financial security in case of an accident with an uninsured or underinsured driver.
The Court was unpersuaded by Progressive’s argument of unfairness, noting that Progressive can price its UM coverage appropriately within the constraints of the law. The court places the responsibility on Progressive to draft compliant policies and price them correctly rather than denying UM coverage that conforms to Oklahoma statutes and public policy.
The Coates case is a good reminder for Oklahoma consumers to check their policies to ensure they have appropriate UM coverage protecting them in various situations. Purchasing extra protection provides an added level of financial security for you and your family.
