INSURANCE-RELATED COURT CASES
Digested from case reports published online
No coverage for bike
The federal district court for the District of South Carolina certified a question of law to the South Carolina Supreme Court. In 2019, USAA Casualty issued a personal automobile policy to Megan Jenkins. The policy defined “your covered auto” as any vehicle shown on the policy’s declaration, any newly acquired vehicle, and any trailer owned by the insured.
While riding her bicycle, Jenkins was struck and killed by an underinsured motorist. Defendant Vincent Rafferty—Jenkins’ personal representative—made a claim under Jenkins’ policy for underinsured motorist coverage property damage arising from damage to the bicycle.
USAA Casualty Insurance Company denied the claim and commenced an action in federal court, asserting that Jenkins’ bicycle did not fall within the definition of “your covered auto.” Whether USAA prevailed depended on whether automobile insurers were required to offer UIM property damage coverage at all. If insurers were not required to offer UIM property damage coverage, they were free to restrict such coverage to an insured’s “covered auto.”
The federal court asked the Supreme Court whether, under South Carolina law, an auto insurer could validly limit underinsured motorist property damage coverage to property damage to vehicles defined in the policy as a “covered auto.”
In their briefs and during oral argument, the parties did not directly address the question as framed by the district court. Instead the parties argued the broader question of whether an automobile insurer’s offer of underinsured motorist coverage had to include property damage coverage.
Because the answer to the broader question yielded the answer to the certified question, the Supreme Court addressed the parties’ question. USAA rightly conceded that if the Supreme Court held that an insurer was required to offer UIM property damage coverage, the court had to answer the certified question “no.” The court held that insurers were required to offer UIM property damage coverage and therefore answered the certified question “no.”
USAA Casualty v. Rafferty—South Carolina Supreme Court—March 29, 2023—No. 28143.