Dessel v. Farm and City Ins. Co.

• Decision Date: 20 January 1993
• Docket Number: No. 92-292,92-292
• Citation: 494 N.W.2d 662
• Parties: Peter DESSEL, Appellant, v. FARM AND CITY INSURANCE COMPANY, Appellee.
• Court: Iowa Supreme Court

Page 662

494 N.W.2d 662

Peter DESSEL, Appellant, v. FARM AND CITY INSURANCE COMPANY, Appellee.

No. 92-292.

Supreme Court of Iowa.

Jan. 20, 1993.

Jim R. Lawyer and Tom L. Drew, West Des Moines, for appellant.

David J. Grace of Davis, Grace, Horvath, Rouwenhorst & Vernon, P.C., West Des Moines, for appellee.

Considered by LARSON, P.J., and CARTER, LAVORATO, NEUMAN, and ANDREASEN, JJ.

LARSON, Justice.

Peter Dessel, an insured party under a policy written by Farm and City Insurance Company appeals from a judgment of the district court upholding an "owned but not insured" provision of the policy. We affirm.

Dessel was seriously injured when the motorcycle he was operating collided with a milk truck. The truck was insured for liability, but its limits of $100,000 were inadequate to compensate Dessel for his injuries.

Dessel's motorcycle did not have underinsured motorist coverage; however, his 1974 pickup truck had $20,000 in underinsured motorist coverage, and that is the subject of this action. Dessel demands payment of that amount from his insurance company.

The problem with Dessel's case is that his pickup policy had this exclusion:

We do not provide Underinsured Motorist Coverage for bodily injury sustained by any person:

1. While occupying ... any motor vehicle owned by you ... which is not insured for this coverage under this policy.

Because the parties agree for purposes of this appeal that Dessel is otherwise entitled to coverage under the underinsured motorist provision of his policy because he was "legally entitled to recover" against the truck driver, the sole issue is whether the "owned but not insured" exclusion is valid.

Dessel claims that such an exclusion is not valid because of the language of section 516A.1 (1991), which requires coverage

for the protection of persons insured under such policy who are legally entitled to recover damages from the owner or operator of an uninsured motor vehicle or a hit-and-run motor vehicle or an underinsured motor vehicle because of bodily injury, sickness, or disease, including death resulting therefrom....

This court has had occasion to examine similar clauses in the context of uninsured motorist coverage, Lindahl v. Howe, 345 N.W.2d 548 (Iowa 1984), as well as in the context of underinsured coverage. See Kluiter v. State Farm Mut. Auto. Ins. Co., 417 N.W.2d 74 (Iowa 1987). As to un-insured motorist coverage, we struck down the "owned but not insured" exclusion on the ground that it violated section 516A.1. Lindahl, 345 N.W.2d at 551.

In Kluiter, we distinguished Lindahl on the ground that, in an uninsured motorist case, recognition of the exclusion would deny the insured any coverage, while in the context of the underinsured motorist coverage, the insured would at least have recovered the policy limits of the tortfeasor's insurance. Kluiter, 417 N.W.2d at 75.

Dessel's injuries were sustained while operating a motorcycle owned by him on which he had elected to carry no insurance. A motorcycle, of...