LANE v. PROGRESSIVE NORTHERN INSURANCE CO., 494 P.3d 345

Single-car rollover in Oklahoma: Lane and L.S. (passengers) injured; driver (a minor) insured under parents' Progressive policy.
Progressive policy provided $100,000 per person/$300,000 per accident liability (Part I) and $100,000/$300,000 UM (Part III); premiums were paid for both.
Lane and L.S. recovered the $100,000 liability limit but their damages exceeded that amount.
Progressive denied UM/underinsured-motorist claims relying on a policy exclusion that bars UM where liability coverage equal to or greater than Oklahoma's statutory minimum ($25,000) is available.
Plaintiffs sued in federal district court (breach/bad faith); district court ruled for Progressive. Tenth Circuit certified the statutory question to the Oklahoma Supreme Court.
Certified question: whether Progressive’s UM exclusion contravenes Oklahoma’s UM statute, 36 O.S. § 3636.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Progressive's UM exclusion violates 36 O.S. § 3636	Exclusion is void as public policy because it negates bargained-for UM coverage and deprives insureds of paid protection	Exclusion is permitted: statute does not forbid exclusions and the policy ensures at least statutory minimum is available via liability or UM	Yes. Exclusion contravenes § 3636 and is void as against public policy
Whether enforcing the exclusion is defensible because it reflects legislative latitude and avoids overprotecting Class 2 insureds	Coverage entitlement flows from being an insured; class status doesn't defeat UM purchased by policyholder	Dissent: ruling yields illogical disparity (Class 2 may get more than Class 1); Legislature can prohibit exclusion if desired	Majority rejects parity objection; enforces UM coverage per § 3636 (disagreement preserved in dissent)

Burch v. Allstate Ins. Co., 977 P.2d 1057 (Okla. 1998) (insurers must assure contracted UM coverage; rejects set-off that defeats UM recovery)
State Farm Auto. Ins. Co. v. Greer, 777 P.2d 941 (Okla. 1989) (primary purpose of UM is to protect insured from uninsured/underinsured tortfeasor)
State Farm Mut. Auto. Ins. Co. v. Wendt, 708 P.2d 581 (Okla. 1985) (exclusions that dilute legislatively mandated UM coverage receive critical scrutiny)
Ball v. Wilshire Ins. Co., 221 P.3d 717 (Okla. 2009) (policyholder has choice to accept/reject UM; exclusions permissible only if they do not negate that choice)
Russell v. Am. States Ins. Co., 813 F.2d 306 (10th Cir. 1987) (characterized similar exclusion as a "Catch-22" that impermissibly limits § 3636)
Hartline v. Hartline, 39 P.3d 765 (Okla. 2001) (liability and UM are components of an integrated system; obligation to provide statutory minimum)
Bohannan v. Allstate Ins. Co., 820 P.2d 787 (Okla. 1991) (courts should protect insured's UM rights purchased)
May v. Nat'l Union Fire Ins. Co., 918 P.2d 43 (Okla. 1996) (statutorily required UM coverage construed liberally in favor of insured)