ANALYSIS OF DECEMBER 1, 2022 SUPREME COURT OPINION

(Posted December 1, 2022) I got one right! At the time of the Supreme Court’s November session four weeks ago, I gingerly predicted that today would be the first likely date on which we might see rulings from that session. Today the court hands down a single opinion in an insurance-coverage case.

The issue in Geico Advantage Insurance v. Miles is whether an insured can “stack” the uninsured coverage and the underinsured coverage in a single policy. Miles was injured in a collision caused by two other drivers. One of the others stopped at the scene; the other took the coward’s approach and fled. He thus became John Doe.

The driver who stopped at the scene had statutory minimum coverage of $25,000 per claimant. Miles’s special damages greatly exceeded that, so she turned to two insurance policies that protected her: her own vehicle’s policy, and one owned by her brother, with whom she lived. Each had $50,000 in UM/UIM coverage. Geico affiliates issued both of these policies.

The at-fault driver’s insurer tendered its $25K policy limits. Miles sought payment from the two Geico policies, asking for $75K from her own policy and $100K from her brother’s. She reasoned that she was injured by both an uninsured driver and an underinsured driver, so both coverages applied. Allowing a credit for the original $25K, that made her claims on the Geico policies $175,000.

Geico responded that it only owed $50,000 on each of the policies. That led Miles to head to court, where she filed a declaratory-judgment suit against the insurers. The circuit court agreed with Miles and found that both policies’ UM and UIM coverage were available to her. The court declared that Geico owed her another $75,000.

Today’s opinion from the Supreme Court notes that there’s a split in the circuits on this issue. Today the court comes down on the side of the insurer, holding that UIM coverage is derivative of uninsured coverage. It then rules that you can’t stack both, even where, as here, the injuries are caused by one uninsured and one underinsured driver.

My sense is that this may be a very significant ruling in tort law, as inflation has steadily eroded the value of statutory minimums.