In Michigan, an insured was driving his tractor down a local road when he was struck from the rear by a speeding car. He was thrown from the tractor and, days later, died of his injuries. 

The owner of the car was riding as a passenger and his girlfriend was driving. Both were injured and survived. The vehicle was insured for the state minimum $50,000/$100,000 for bodily injury liability coverage. The driver was uninsured. The driver left the hospital before being released and still cannot be found.

At the time of the accident, the victim carried a business auto policy (CA 00 01 03 10). He and his wife were named insureds. They insured three private passenger vehicles, not the tractor. All coverages were symbol 7. They carried uninsured/underinsured motorist coverage for $1 million under CA 21 31 03 06. They also carried named individuals broadened personal injury protection coverage (CA 22 01 01 87) and drive other car (DOC) coverage (CA 99 10 09 02) extending coverage to uninsured motorists. Both named insured are also listed under these endorsements.

A UM/UIM claim was filed and was subsequently denied. The claim representative cited the UM/UIM coverage line in the BAP and stated coverage did not apply because the farm tractor was not specified on the policy. The claim representative did not cite the UM/UIM coverage form.

Q: UM/UIM coverage would be available if the victim had been a pedestrian or riding a bicycle. Why not while riding a farm tractor?

Response 1: The insurance company has concluded that:

• The policy only provides insurance for accidents involving covered autos.
• Symbol 7 specifically described "autos" are only those autos described in the declarations for which a premium charge is shown.
• The tractor owned by the insured was not described in the declarations and thus there was no UM/UIM premium shown for this vehicle.
• Therefore, there is no coverage for the UM/UIM claim of the named insured.

The insurance company's conclusion would be correct. The liability insuring agreement specifically applies to “covered autos":

We will pay all sums an "insured" legally must pay as damages because of "bodily injury" or "property damage" to which this insurance applies, caused by an "accident" and resulting from the ownership, maintenance or use of a covered "auto".

The physical damage insuring agreement specifically applies to loss to a covered “auto":

1. We will pay lor ''loss" to a covered "auto" or its equipment under:

c. Collision Coverage

Caused by:

(1) The covered "auto's" collision with another object; or

(2) The covered "auto's" overturn.

But here we are dealing with a UM/UIM claim. The Michigan UM/UIM form CA 21 31 03 06 insuring agreement makes no mention of “covered autos" but, instead, focuses on who is insured:

We will pay all sums the “insured" is legally entitled to recover as compensatory damages from the owner or driver of an “uninsured motor vehicle". The damages must result from “bodily injury" sustained by the “insured", caused by an "accident". The owner's or driver's liability for these damages must result from the ownership, maintenance or use of the “uninsured motor vehicle".

In short, the UM/UIM coverage follows the named insured, not covered autos. There is no exclusion in the Michigan form denying UM/UIM for the named insured while occupying a non-covered auto.

The victim was a named insured on the policy. He died as a result of the use of an “uninsured motor vehicle," defined in Michigan to include underinsured vehicles. The insurance company denial is clearly wrong.

Response 2: Unfortunately, the carrier is correct in denying the claim. Your insured was struck in a farm tractor, which is not a covered auto. A case almost identical to this in Iowa was litigated, and even appealed, and found in favor of the carrier.

This is an issue that has been brought up at the Mid-America Insurance Conference to ISO as an agenda item. There is a way to provide coverage for a farm tractor or other farm equipment, but the possibility of finding a carrier to actually do it is difficult.

The tractor would have to be specifically scheduled using ISO endorsement CA 20 15. There are a number of problems you might encounter while trying to find a carrier to add this endorsement:

• Will a carrier be willing to add the coverage without liability or physical damage? Liability for farm equipment would typically be covered under the farm liability policy, and physical damage covered under farm personal property. Practically speaking, what is the likelihood of a carrier adding this endorsement with just UM/UIM coverage?
• If a carrier would add UM/UIM along with liability, comprehensive and collision, you now have the problem of two carriers covering the same exposure.
• Carriers struggle to know what rate to charge for the exposure.

Even if a carrier is willing to add this endorsement, keep in mind that each piece of farm equipment must be specifically scheduled. Ideally, a creative farm liability carrier would add this coverage.

Response 3: The denial points to the basic policy and makes no mention of the DOC form CA 99 10. The DOC is the only part that matters.

You are correct that the insured does not need to be operating a "covered auto" for this coverage, and the insured could have been a pedestrian, or cutting grass on a riding lawn mower, or sitting on his front porch at the time the driver caused bodily injury to the insured. The DOC responds to those situations because it creates direct grants of coverage to the named individuals without deriving the coverage through operation of a "covered auto," and does not use the limits given to a covered auto.

This question was originally submitted by an agent through the Big “I" Virtual University's (VU) Ask an Expert service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.

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