454 P.3d 1126
Idaho2019Background
- In January 2015 Deena Wood was seriously injured in a car collision; her medical costs exceeded the at-fault driver’s liability limit ($100,000).
- Wood held a Farmers auto policy with $100,000 of underinsured motorist (UIM) coverage.
- Farmers’ policy contained an offset provision: UIM benefits "shall be reduced by the full amount of any bodily injury liability ... available to any party held liable for the accident."
- Farmers denied Wood’s UIM claim because the at-fault driver’s $100,000 liability limit equaled Wood’s $100,000 UIM limit, producing a $0 UIM payment after offset.
- Wood sued; the district court granted summary judgment to Farmers and denied her motion for reconsideration (her public-policy challenge to the offset provision was rejected).
- On appeal the sole issue was whether the offset provision, as applied, violates Idaho public policy; the Supreme Court affirmed the district court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an offset provision that reduces UIM benefits by the at-fault driver’s liability limit violates Idaho public policy | Wood: the offset "dilutes" or effectively eliminates UIM protection and is contrary to the public policy created by HB 429 (citing Hill and Eastman) | Farmers: Idaho law contemplates different forms of UIM (including offset/difference-in-limits); legislature chose not to mandate excess-only coverage | Court: Affirmed. Offset provision does not violate public policy; HB 429 and I.C. § 41-2502 permit different forms of UIM and the legislature rejected mandating excess-only coverage |
Key Cases Cited
- Hill v. American Family Mut. Ins. Co., 150 Idaho 619 (Idaho 2011) (held HB 429 created a public policy requiring disclosure of UIM options and invalidated provisions that effectively eliminated UIM coverage)
- Eastman v. Farmers Insurance Company, 164 Idaho 10 (Idaho 2018) (applied public-policy analysis to strike policy language that nullified UIM protection in certain contingencies)
- Andrae v. Idaho Counties Risk Mgmt. Prog. Underwriters, 145 Idaho 33 (Idaho 2007) (pre-HB 429 decision recognizing no statutory requirement to offer UIM and thus no related public policy at that time)