What Happens When Your Auto Policy Lacks UM/UIM Coverage?

An agency insures a corporation president who drives a vehicle that is owned by the business entity and covered under a business auto policy. He decides not to include uninsured/underinsured motorist coverage in the BAP. Note that in this state, UIM falls within the meaning of UM.

The president is involved in an accident with an underinsured driver. The underinsured driver is at fault, and the president sustains an injury. He needs to file a UM/UIM claim, but his BAP does not include UM/UIM coverage. However, he does have UM/UIM coverage under his personal auto policy.

Q: The vehicle involved in the accident was the company vehicle, which is not listed on the president’s PAP. However, he’s the named insured on the policy. Can he file a UM/UIM claim on his PAP? I understand workers compensation coverage may pay for his injuries—I just want to clarify the UM/UIM question.

Response 1: There’s not enough detail here for an air-tight ruling, but Exclusion 1 on page 12 seems to rule out coverage on the grounds that the injury occurred while occupying a vehicle “regularly furnished” for that person's use.

UM forms are unique to each specific state, so there might be an unusual rule for this one. Check your state's rules to be sure. Regardless, report the claim and let the insurance company make the decision.

Response 2: Sure sounds like the vehicle is available for his regular use. If so, here’s the plain exclusionary policy wording (emphasis mine):

An "uninsured motor vehicledoes not include any vehicle or equipment:

a. owned by you, a relative, or a rated resident or furnished or available for the regular use of you, a relative, or a rated resident.

Response 3: You can file a claim on any policy. That doesn't mean it's covered. Carefully review the UM/UIM exclusions in the PAP. My state excludes vehicles furnished or available for your regular use that are not declared on the policy for UM/UIM coverage.

Response 4: This language from the policy could exclude coverage (emphasis mine):

Coverage under this Part III will not apply:

1. to bodily injury sustained by any person while using or occupying a motor ve­hicle that is owned by or available for the regular use of you, a relative, or a rated resident. This exclusion does not apply to a covered auto, a rental auto, or a temporary substitute auto that is insured under this Part III.

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