Best v. Auto-Owners Ins. Co., AUTO-OWNERS

Decision Date24 February 1989
Docket NumberAUTO-OWNERS
Citation540 So.2d 1381
PartiesWilliam BEST, Jr. v.INSURANCE COMPANY. 87-1347.
CourtAlabama Supreme Court

R. Wayne Wolfe of Wolfe & Jones, Huntsville, for appellant.

Patrick M. Lamar of Lanier, Ford, Shaver & Payne, Huntsville, for appellee.

MADDOX, Justice.

This case involves an underinsured motorist coverage question, and presents a conflict of laws question regarding which of two states' laws should apply. The parties do not dispute the facts, which were stipulated in the trial court. These facts are as follows:

"On June 10, 1985, William Best was involved in an automobile accident in Blount County, Alabama. Mr. Best and his son were returning to their home in Taylors, South Carolina, after a visit with Mr. Best's son's fiance. William Best was at all times relevant to this action a resident of South Carolina. The vehicle in which Mr. Best was travelling belonged to him, and was principally garaged in South Carolina.

"Mr. Best and his son sustained serious injuries in the accident. The adverse driver was insured at the time. Suit was never filed, and a settlement was reached with the adverse driver and his insurance company to pay the limits of the driver's liability policy.

"At the time of the accident, Mr. Best was covered by a policy of insurance issued in South Carolina by Auto-Owners. The policy covered two automobiles and provided $15,000.00 per person, $30,000.00 per occurrence coverage for uninsured motorist damage claims. The application for the policy was completed in South Carolina and expressly did not include coverage for underinsured motorist bodily injury damage. No premium was ever paid to Auto-Owners for underinsured motorist coverage by William Best, Jr."

Upon consideration of the stipulated facts, the exhibits, and argument of counsel, the trial court determined that Best was "not entitled to recover benefits for underinsured motorist bodily injury damage under the subject policy."

The issue before us is whether the contractual obligations of the parties are governed by the subject policy, which was issued in South Carolina, or by the laws of the State of Alabama.

Insofar as we can determine, there are only two circumstances under which Best would be entitled to recover underinsured motorist benefits under the subject policy. The first would be if Best had purchased underinsured motorist coverage. The second would be if the policy contains language calling for application of Alabama law pertaining to underinsured motorist coverage.

Because both parties agree that Best has no underinsured motorist coverage under the policy, it is necessary for us to determine only whether the second possible situation exists.

Best rests his argument that the subject policy creates underinsured motorist coverage upon the following clause contained therein:

"When you operate your automobile in another state or Canada, this policy will meet the requirements of any financial responsibility or similar law. If the state or province has a compulsory insurance or similar law which requires non-residents to have special motor vehicle insurance, this policy will cover the required minimum amounts and types of coverage. But, this policy will not duplicate payments available under this or any other insurance for the same elements of loss."

Best argues that this clause incorporates every provision of the Alabama Motor Vehicle Safety-Responsibility Act into the contract. We disagree.

In South Carolina, where the contract was executed, there is a distinction between uninsured and underinsured motorist coverage. Uninsured motorist coverage is mandatory, while underinsured motorist coverage is optional. In short, underinsured motorist coverage must be offered, but the prospective insured has the prerogative of rejecting such coverage. See S.C.Code Ann., § 56-9-830 (1976) and § 56-9-831 (Supp.1986).

Alabama, on the other hand, makes no distinction between uninsured and underinsured motorist coverage. The two are...

To continue reading

Request your trial
13 cases
  • Brown Mach. Works & Supply Co., Inc. v. Insurance Co. of North America
    • United States
    • Alabama Supreme Court
    • March 31, 1995
    ...be enforced as written. See, e.g., id.; Gardner v. Cumis Ins. Society, Inc., 582 So.2d 1094, 1096 (Ala.1991) (citing Best v. Auto-Owners Ins. Co., 540 So.2d 1381 (Ala.1989)). While the fact that an insurance policy is written by the insurance company is often noted in conjunction with the p......
  • Browder v. General Motors Corp.
    • United States
    • U.S. District Court — Middle District of Alabama
    • November 24, 1997
    ...Ala. 606, 243 So.2d 736 (1970), such coverage is not compulsory and may be rejected by the insured. See Ala Code § 32-7-23 (1975); Best, 540 So.2d at 1382; Insurance Co. of N. Am. v. Thomas, 337 So.2d 365 (Ala.Civ.App.1976); State Farm Mut. Auto. Ins. Co. v. Martin, 292 Ala. 103, 289 So.2d ......
  • Smith v. State Farm Mut. Auto. Ins. Co.
    • United States
    • Alabama Supreme Court
    • July 21, 2006
    ...the available underinsured-motorist benefits without reviewing whether Tennessee conflicts law applies); Best v. Auto-Owners Ins. Co., 540 So.2d 1381, 1381-83 (Ala.1989)(stating that the conflict-of-laws issue was presented in underinsured-motorist-coverage case, and, without reference to S......
  • Garnett v. Allstate Ins. Co.
    • United States
    • Alabama Supreme Court
    • August 31, 1990
    ...court entered summary judgment for Allstate. Allstate's liability under its contract is governed by Georgia law. Best v. Auto-Owners Ins. Co., 540 So.2d 1381 (Ala.1989); Davis v. Hartford Ins. Co. of Illinois, Inc., 456 So.2d 302 (Ala.1984); American Interstate Ins. Co. of Georgia v. Hollid......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT