In Higgins v. Louisiana Farm Bureau Casualty Insurance Company, 315 So.3d 838 (2021), the claimant was injured in a motor vehicle accident while operating a truck owned by his employer. The tortfeasor was underinsured. The employer’s policy did not have underinsured motorist coverage. The employee then sought UIM coverage under his personal auto policy issued by Farm Bureau. Farm Bureau denied the claim, relying upon the policy’s regular use exclusion in the UM portion of the policy. The exclusion prohibited coverage regarding automobiles furnished or available for the regular use of the named insured. During the ensuing litigation regarding the coverage denial, the trial court ruled in the insured’s favor, finding that the regular use exclusion violated Louisiana statute. The Louisiana Appellate Court reversed and the Louisiana Supreme Court reversed the Appellate Court.
The Louisiana Supreme Court held that the UM regular use exclusion did not apply in situations where the insured was operating a vehicle owned by his employer. The Court set forth a two-step analysis in reaching that conclusion. The first step was to determine whether UM coverage was contractually provided under the express provisions of the policy in question. The second step was to determine, where no contractual UM coverage was found, whether statutory UM coverage was mandated to be included within the policy. With respect to the case at bar, the Farm Bureau policy contractually provided UM coverage. Because coverage was provided for in the policy, the Court then looked to determine whether the insured was entitled to statutory UM coverage.
Under Louisiana law, every automobile insurance policy was required to include UM coverage for insured persons unless the coverage was expressly rejected. UM coverage was an implied amendment to all automobile policies in Louisiana. The coverage would be read into the policy unless it was validly rejected. The Court observed that the statutory UM exception for vehicles owned by the insured not declared in the policy was a limited exception to Louisiana’s UM statute and was intended only to keep vehicle owners from carrying UM coverage on only one of two or more owned vehicles, thereby obtaining UM coverage at the cost of only one policy. Because of this, the Court held that the exception applied only to vehicles owned by the insured. In the case at bar, because the vehicle involved in the accident was owned by the employer, the Court held that the language of the UM statutory exception only allowed for regular use exclusions with respect to owned vehicles.