The Arizona Supreme Court has ruled that insurance companies cannot sidestep state law through the use of ‘creative policy drafting’. Specifically, the court ruled that a single auto insurance policy covering multiple vehicles must provide separate uninsured motorist coverages for each vehicle, dismissing attempts to evade statutory requirements.
In the underlying case, Franklin v. CSAA General Insurance, Kay Franklin’s mother tragically died in an auto accident caused by a negligent driver. Franklin then collected the per person liability limit of the negligent driver’s insurance policy of $25,000 and made an underinsured motorist claim under her mother’s policy with CSAA General Insurance Co.
“Notwithstanding creative policy drafting intended to evade statutory requirements—including technical definitions of coverages and extensive limitation of liability clauses—insurers seeking to prevent insureds from stacking UIM coverages under a single, multi-vehicle policy must employ subsection (H)’s sole prescribed method for limiting stacking,” Justice John R. Lopez IV stated in his written opinion for the court.
For a more in-depth analysis of the ruling and its implications, the original article can be accessed here.