Court: Tenn. Insurance Law Still Applies in Miss. Accident Claim

The 5th U.S. Circuit Court of Appeals ruled on Tuesday that limitations on a Tennessee woman’s uninsured/underinsured motorist (UM/UIM) policy should still apply to a claim that originated with a crash that occurred in Mississippi.

According to court documents, the woman who brought the case to the appeals court, Jacquelyn Lowe, had obtained a Tennessee auto insurance policy for her Tennessee–registered vehicle from State Farm before getting into the crash that sparked the case. Part of the protection she had purchased provided for up to $100,000 of UM/UIM coverage.

But that policy said that it would not pay out benefits under the UM/UIM portion of the policy for damages that have already been paid for by the responsible party or under any “workers’ compensation law, disability benefits law or similar law.”

All of this had been established before June 2006, when Lowe—a Tennessee resident—was a passenger in a car, along with three co-workers.

While being driven in Mississippi, the car, stopped at a traffic light, was rear-ended by another vehicle.

Lowe ended up with “a variety of injuries” from the crash, according to court documents.

For compensation for her damages, she ended up being paid about $23,700 from the at-fault driver’s insurance company and about $95,700 in workers’ compensation payments.

Lowe claimed that she was entitle to additional insurance payments through the underinsured motorist section of her policy, which pays for damages when the at-fault party does not have enough coverage or funds to compensate the policyholder for all of his or her damages.

But under Tennessee law, State Farm argued, “it was entitled to offset any available or already received funds against the policy limits.” The 5th Circuit Court said that this fact was “undisputed.” And since the amount already paid out to Lowe exceeded the $100,000 limit, all of her UM/UIM benefits would have been offset by those payments, the insurer argued.

Lowe argued that, while that might be legal in Tennessee, Mississippi law should actually apply in the case, since that’s where the accident occurred.

But, in the end, the 5th U.S. Circuit Court of Appeals found 1. The lower Mississippi court was right in saying that Tennessee law should apply in the case and 2. Even if Mississippi law did apply, other cases had shown that it would not be illegal under those laws for an insurer to require its benefits to be offset by any other benefits that had already been paid for the same accident and 3. The compensation Lowe had already received for the crash exceeded her UM/UIM policy limits.

The  5th Circuit Court found that the lower court was right in its judgment, and ruled that Lowe was not entitled to benefits from State Farm.

About Matthew Morisset
Matthew Morisset is a proud alumnus of the University of Redlands, where he obtained a degree in English Literature. Utilizing his passion for analysis and writing, Matthew looks for important trends in the auto insurance industry and their implications for consumers and the market as a whole.

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