A Progressive policy issued in Oklahoma was targeted to non-duplication of benefits in single vehicle accidents. The Progressive policy excluded coverage for bodily injuries sustained by an insured where liability coverage for the bodily injury was in an amount equal to or greater than the minimum limits of liability required by Oklahoma’s financial responsibility law. On first impression, the Oklahoma Supreme Court invalidated the UM exclusion in Lane v. Progressive Northern Insurance Co., 494 P.3d 345 (Okla. 2021). In doing so, the Court characterized the policy exclusion as a UM exclusion when it should have been more appropriately referred to as an insured auto exclusion. The exclusion was designed to prevent stacking of both liability limits and uninsured motorist coverage limits in single vehicle accidents.
In Lane, two passengers were seriously injured in a single vehicle rollover accident. The vehicle involved in the rollover was insured by Progressive with liability limits of $100,000 per person/$300,000 per accident. Each of the two passengers received the maximum per person limit of liability benefits. The two passengers then submitted uninsured motorist claims under the same policy. The U.S. 10th Circuit Court of Appeals certified the question regarding the exclusion’s validity to the Oklahoma Supreme Court. The Oklahoma Supreme Court held that the exclusion impermissibly restricted UM coverage that was required by the Oklahoma UM statute. The Court reasoned that the Oklahoma legislature amended the state’s UM statute to require excess type UM insurance. The Oklahoma legislature was not a gap jurisdiction and was not an offset jurisdiction. According to the Oklahoma Supreme Court, because Oklahoma’s legislature intended to provide insureds with UM benefits whenever the insured’s injuries exceeded the available liability coverage of the tortfeasor’s policy, and because the injuries of the passengers in this case exceeded the available liability coverage, any type of “insured autos” exclusion that frustrated that legislative purpose was not enforceable.