Hamrick v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 06 February 1978
• Docket Number: No. 20593,20593
• Citation: 241 S.E.2d 548,270 S.C. 176
• Court: South Carolina Supreme Court
• Parties: Jeanette E. HAMRICK, Administratrix of the Estate of Dale Hamrick, Respondent, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant.

Page 548

241 S.E.2d 548

270 S.C. 176

Jeanette E. HAMRICK, Administratrix of the Estate of Dale Hamrick, Respondent, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant.

No. 20593.

Supreme Court of South Carolina.

Feb. 6, 1978.

H. Spencer King of King & Cole, Spartanburg, for appellant.

Ben C. Harrison, Spartanburg, for respondent.

LITTLEJOHN, Justice:

This action was brought by the respondent, Jeanette E. Hamrick, as Administratrix of the estate of her husband, Dale Hamrick (decedent), against the appellant, State Farm Mutual Automobile Insurance (State Farm), decedent's automobile insurance carrier. In effect at the time of decedent's death was a policy of insurance which provided coverage pursuant to the Automobile Reparation Reform Act of 1974 (the Act). The plaintiff, which we will refer to as "the estate," seeks to recover disability benefits or loss of income alleged to have been provided by the policy of insurance and required by the Act.

The case was tried by the judge without a jury and resulted in a judgment for the estate in the amount of $3,569.07. ¹ This amount represents solely the loss of decedent's earnings which would have been collected by him had he lived. State Farm appeals.

The facts out of which this claim arose are not in dispute. The decedent, on the evening of December 7, 1975, was struck by an automobile while attempting to cross Interstate Highway 85 on foot. He was pronounced dead on arrival at the hospital. At the time of his death, the policy of insurance issued by State Farm provided no fault personal injury protection (PIP) benefits in the amount of $5,000.00.

The Act, which is now codified as § 56-11-10, et seq., Code of Laws of South Carolina (1976), mandates all insurance carriers writing policies of automobile liability insurance in South Carolina to provide minimum medical, hospital and disability benefits in the amount of $1,000.00, which coverage may, at the option of the insured person, be increased to $5,000.00. The policy here involved was increased to this maximum amount. These benefits, commonly referred to as PIP benefits, are payable directly to or for the person who purchases the policy (here the beneficiary is the decedent) regardless of who was at fault, when the insured suffers bodily injury as a result of an automobile accident.

There can be no question but that the statute and the policy require the payment of disability benefits while an insured person is living and recuperating. The question which we must decide is whether disability benefits provided by the statutory mandate of coverage includes loss of income after the death of the insured.

A policy of insurance issued pursuant to statutory law must at a minimum give the protection therein described. It may give more protection but not less, and a policy issued pursuant to the law which gives less protection will be interpreted by the court as supplying the protection which the legislature intended. Jordan v. Aetna Casualty & Surety Co., 264 S.C. 294, 214 S.E.2d 818 (1975).

The statute requires benefits as follows:

" § 56-11-110. Minimum medical, hospital and disability benefits required; proof of loss of income; subrogation or assignment of benefits.

Except as otherwise provided in this article, no policy or contract . . . of liability insurance . . . shall be issued, delivered, sold or renewed in this State after October 1, 1974, unless such policy also affords the minimum medical, hospital and disability benefits set forth herein. . . . The minimum medical, hospital and disability benefits shall include up to an amount of one thousand dollars per person for payment of all reasonable expenses arising from the accident sustained within three years from the date thereof for necessary medical, surgical, chiropractic, x-ray and dental services, including prosthetic devices, and necessary ambulance, hospital, professional nursing and funeral services; and in the case of an income producer, payment of benefits for loss of income as the result of the accident; . . . . The insurer providing loss of income benefits may require, as a condition of receiving such benefits, that the injured person furnish the insurer reasonable medical proof of his injury causing loss of income . . .." (Emphasis added.)

Our decision hinges largely upon the meaning of the term "disability" or "disability benefits."

The estate takes the position that the legislature intended that "loss of income" after one's death, as well as "loss of income" while one is recuperating, be covered by the policy.

On the other hand, State Farm submits that the word "disability," as used in the statute and in the policy, refers to lack of ability to earn while one is living.

The key concept embodied in PIP no fault coverage is that an injured person needs to promptly pay expenses necessarily arising out of injuries sustained, and needs support for himself and his family during the period of recuperation. The Act appreciates the fact that contested negligence tort actions are often prolonged and do not provide for the needs of injured persons at the time when the need is greatest. It is not the function of PIP no fault insurance coverage to provide funds for the creation or enhancement of one's estate. Such funds, if collected by an estate, would be subject to the payment of debts and/or distribution among heirs, or among beneficiaries under a will. The fact that one is not entitled to PIP no fault benefits does not, of course, limit his right of action in tort. Income which might have been earned after death is properly collectible in a tort action.

The purpose of PIP no fault coverage has been declared in the statute itself and must be considered in interpreting the statute.

" § 56-11-20. Legislative declaration of purpose.

The purpose of this chapter is to require medical, surgical, funeral and disability insurance benefits to be provided without regard to fault under motor vehicle policies that provide bodily injury and property damage liability insurance, . . .." (Emphasis added.)

As indicated hereinabove, our decision hinges largely upon the interpretation of the word "disability." In its usual connotation, it implies the inability of a living person to work. In one sense of the word, a person who is deceased is truly disabled, but one does not speak of a dead person as being disabled. We will assume that the legislature intended the use of the word "disability" in...