Wе are asked in this appeal to decide whether, under an automobile insurance policy approved by the Commissioner of Insurance fоr use in 1981, a party injured in an automobile accident has the right to arbitration of a claim against an insurance company for underinsurance benefits before all claims he might have against alleged tortfeasors have been settled or judicially resolved. We think he does have that right and we affirm, therefore, a Superior Court judgment which, among other things, declared that the plaintiff, Aetna Casualty and Surety Company (Aetna), has a present obligation to arbitrate the defendant’s demand for underinsurance benefits, notwithstanding the pendency of a claim against an individual allegedly liable for the injuries.
Aetna offerеd $10,000 to compensate Kevin for his injuries. This offer was refused, and a demand was made on Kevin’s behalf for arbitration. Aetna refused to arbitrate and brought this action seeking both a preliminary injunction and a declaration that the demand for arbitration, prior to the exhaustion of all claims for liability insuranсe proceeds, was premature. 1
The Aetna policy provided underinsurance benefits consistent with the requirements of G. L. c. 175, § 113L.
2
The policy
The arbitration clause in Aetna’s policy, on its face, applies to the dispute in its current phase. Aetna and the dеfendant do not agree as to James Faris’ liability nor to the amount of Kevin’s damages. There is nothing in the underinsurance statute or the policy terms expressly requiring exhaustion of claims against alleged tortfeasors prior to arbitration. To the contrary, the liability and damage issues involved in claims for uninsured motorist benefits, which for these purposes are analogous, are routinely decided by arbitration. See
Employers’ Fire Ins. Co.
v.
Garney,
Aetna contends that, notwithstanding the absence of an express exhaustion requirement in the underinsurance statute and their insurаnce policy, the scheme of both implicitly requires that claims against alleged tortfeasors be resolved before the parties resort to arbitration. Underinsurance benefits, Aetna argues, are due under the statute and their policy only if the tortfeasors’ policies are insufficient in limits of liability to satisfy the damages. It follows, they say, that the liability and damage issues must be resolved before it can be known whether the claimant has the right to any underinsurаnce benefits. The parties agreed in the policy, however, that an arbitrator could decide the questions of liability and damages. To the extent that the arbitration might precede in time an inconsistent judicial resolution of a tort claim, the insurer is either protected by its subrogation rights in the policy and the statute (G. L. c. 175, § 113L [4]) or the result is but an inevitable consequence of the selection of a procedure that has numerous advantages to all parties. Were we to adopt Aetna’s interpretation, the potential advantages flowing from the presence of the arbitration clause — speed, efficiency, and cost — would be entirely thwarted. We assume that in requiring underinsurance coverage, the Legislature was concernеd with protecting victims of automobile accidents not only against the possibility of “catastrophic financial loss”
(Cardin
v.
Royal Ins. of America,
Although the rule that arbitration may be demanded before exhaustion of all potential liability claims is not uniform, аnd although governing statutes and policy provisions vary from State to State, there is support elsewhere for the rule we adopt. See, e.g.,
Detroit Auto. Inter-Ins. Exchange
v.
Spafford,
Judgment affirmed.
Notes
The defendant had filed a counterclaim seeking declaratory and injunctive relief with respect to the arbitration, and damages under G. L. c. 93A. The judge did not act on the counterclaim, and it is nоt mentioned by the parties in their appellate briefs. The resolution of the issues raised by the complaint makes the counterclaim moot.
Genеral Laws c. 175, § 113L (1), as appearing in St. 1980, c. 532, § 1, provides:
“No policy shall be issued or delivered in the commonwealth with respect to a motor vehiclе . . . registered in this state unless such policy provides coverage in amounts or limits prescribed for bodily injury or death for a liability policy under this chaptеr, under provisions approved by the insurance commissioner, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles . . . because of bodily injury, sickness or disease, including death resulting therefrоm, and coverage for the protection of persons insured thereunderwho are legally entitled to recover damages from owners or оperators of insured motor vehicles . . . whose policies or bonds are insufficient in limits of liability to satisfy said damages, to the extent that said damages exceed said limits of liability subject to the terms of the policy.”