How does your state treat insurance policy exclusions which state that a personal cannot obtain uninsured or underinsured motorist coverage if they are injured in a car accident and receive workers compensation benefits?
For a copy of the various opinions feel free to contact Scott B. Cooper at Schmidt Kramer.
Scott B. Cooper
Schmidt Kramer PC
209 State Street
Harrisburg, PA 17101
(717) 232-6300 – Telephone
(717) 232-6467 – Facsimile
In Heller v. Pennsylvania League of Cities the Pennsylvania Supreme Court yesterday struck down an exclusion in a motor vehicle insurance policy which excluded underinsured motorist (UIM) coverage if the insured is injured while acting in the course and scope of his employment but received workers compensation benefits.
The case involved Frank Heller who was working as a police officer at the time of an accident with an underinsured motorist. His police department’s vehicle actually had UIM coverage since it was bargained for and purchased. However, an exclusion in the policy stripped the coverage if the insured was injured in the course and scope of his or her employment and received worker’s compensation benefits. The Pennsylvania Supreme Court agreed to address whether this exclusion violates public policy.
The Majority Opinion by Justice Orie Melvin observes that if the exclusion is upheld the UIM coverage would be bascially illusory. Also, the goal of having workers compensation subrogation in car accidents prevail over the auto insurance carrier from Act 44 would not be furthered.
Thus, the Court writes that, "[i]n summation, we find that while the exclusionary provision does not facially violate the cost containment policy of the MVFRL, its inclusion in an employer-sponsored policy operates to foreclose the majority of expected claims. Thus, the exclusion renders the coverage illusory, and the insurer receives a windfall by charging a premium for the coverage. Moreover, where a third-party tortfeasor causes a work-related injury, Act 44 dictates that the ultimate burden for the payment of benefits must rest upon the tortfeasor or the UM/UIM carrier. Penn PRIME’s exclusion reverses this legislative priority by frustrating the right of subrogation, thereby ensuring that the burden for the payment of benefits remains on the employer and its workers’ compensation carrier. Since the workers’ compensation exclusion operates to render the instant UIM coverage illusory and runs counter to the intended compensatory scheme established by the General Assembly, we find it void as against public policy." The Court invalidates the workers compensation exclusion.