OPINION
{1} In this case, we consider the extent of coverage afforded a vehicle covered under the “newly acquired ear” provision of an automobile insurance policy. We also address questions concerning double costs, pre-judgment interest, attorney fees, and the rate of post-judgment interest imposed in this case. As to the coverage question, we conclude that under the circumstances of this case, the policy provided additional uninsured motorist (UM) coverage on the newly acquired car and that the coverage could be stacked. Therefore, we affirm on this issue. We further conclude that the trial court did not err in awarding costs; nor did it err in declining to award pre-judgment interest and attorney fees. Finally, we determine that the appropriate rate of post-judgment interest is 8.75%. We thus affirm in part and reverse in part on these issues.
I. BACKGROUND
{2} This case arises from a claim for benefits made by Appellees/Cross-Appellants, Scott and Shana Bird (Parents), after their son, David, was killed in an automobile accident. The material facts are undisputed. The Bird family had four automobile insurance policies with Appellant/Cross-Appellee, State Farm Mutual Automobile Insurance Company (State Farm), at the time of the accident on May 12, 2004. Each policy carried liability and UM coverage of $100,000 per person. Each policy provided thirty-day coverage for a newly acquired car. Prior to April 20, 2004, David drove a Jeep Cherokee (Jeep), which was insured as a named vehicle on one of the four policies. On April 20, 2004, David informed his State Farm agent, Ron Goimarac, that he had purchased a Subaru and that he was trying to sell the Jeep. At that time, the Subaru became the named vehicle on the policy that had originally named the Jeep. Mr. Goimarac informed David that the Jeep would continue to be covered under the terms of the Subaru policy for thirty days but that he would need to obtain a new policy on the Jeep for coverage to continue beyond the thirty-day period. During the thirty-day period, David was riding as a passenger in the Subaru and was killed in an automobile accident.
{3} Parents made a demand for UM coverage on all five cars covered by their State Farm policies. State Farm paid Parents a total of $400,000, consisting of $100,000, based on the per person limit of coverage under the Subaru policy for liability on the driver of the Subaru, and $300,000 in stacked UM coverage under the other three policies. The UM coverage for the Subaru was fully offset by the payment of liability to the coverage limits on the Subaru policy. Therefore, State Farm denied Parents’ claim for benefits due under the UM coverage on the Jeep.
{4} Subsequently, Parents filed a petition for declaratory judgment, seeking an additional $100,000, based on the UM coverage on the Jeep. The parties stipulated that Parents’ damages exceed $500,000. The parties filed cross-motions for summary judgment. The trial court granted summary judgment in favor of Parents in the amount of $100,000. The court also awarded $613.62 in costs to Parents but denied their motion for attorney fees and pre-judgment interest. In the judgment, the trial court made several findings, including one finding that there was no indication State Farm acted in bad faith or unreasonably in failing to pay the claim.
{5} After the case on appeal was assigned to this Court’s general calendar, the trial court entered an order awarding Parents post-judgment interest at 15%, pursuant to NMSA 1978, § 56-8-4 (2004). State Farm filed a motion to include in this appeal the issue regarding the rate of post-judgment interest. This motion was granted. Thus, on-appeal, State Farm raises two issues— whether the coverage extended to the Jeep, pursuant to the Subaru policy, created additional UM coverage that could be stacked and whether Parents are entitled to 15% post-judgment interest. Parents cross-appeal the trial court’s award of costs and the denial of Parents’ motion for attorney fees and pre-judgment interest.
{6} We begin by addressing the coverage extended to the Jeep under the Subaru policy. We then discuss the trial court’s rulings regarding attorney fees, pre-judgment interest, and double costs. Finally, we address the trial court’s award of post-judgment interest. We detail additional facts, including the pertinent terms of the policy, as we address each argument below.
II. DISCUSSION
A. Extent of Coverage
{7} Summary judgment is proper when the material facts are undisputed and the only remaining issues are questions of law. Rehders v. Allstate Ins. Co.,
{8} When granting Parents’ summary judgment motion, the trial court entered judgment in their favor for $100,000. State Farm contends that the judgment should be reversed because Parents are “not entitled to stack based upon the number of vehicles that may be entitled to coverage at a particular time.” State Farm does not argue that the policy is unambiguous. Rather, State Farm contends that by “[ujsing the rationale by the Supreme Court in Monta[ñ]o [v. Allstate Indemnity Co.,
1. Policy Provisions
{9} We begin with the pertinent policy provisions. The coverage in question is provided pursuant to an automatic insurance clause, which provides coverage for a new vehicle acquired by the insured. See generally 8A Lee R. Russ et al., Couch on Insurance §§ 117:2,:3 (3d ed.2005) (stating that an automatic insurance clause is for the benefit and the convenience of the insured and that this provision should be construed liberally in favor of the insured). The coverage language in this case is found in the definitions section of the policy:
Newly Acquired Car — means a replacement car or an additional car.
Replacement Car — means a car purchased by or leased to you or your spouse to replace your car. This policy will only provide coverage for the replacement car if you or your spouse:
1. tell us about it within 30 days after its delivery to you or your spouse; and
2. pay us any added amount due. Additional Car — means an added car purchased by or leased to you or your spouse. This policy will only provide coverage for the additional car if:
1. it is a private passenger car and we insure all other private passenger cars; or
2. it is other than a private passenger [car] and we insure all cars owned or leased by you or your spouse on the date of its delivery to you or your spouse.
This policy provides coverage for the additional car only until the earlier of:
1. 12:01 A.M. Standard Time at the address shown on the declarations page on the 31st day after the delivery of the car to you or your spouse; or
2. the effective date and time of a policy issued by us or any other company that describes the car on its declarations page.
You or your spouse may apply for a policy that will provide coverage beyond the 30th day for the additional car. Such policy will be issued only if both you and the vehicle are eligible for coverage at the time of application.
{10} The language quoted above states that coverage will be provided for a newly acquired car by this policy under certain conditions. State Farm does not dispute that the conditions of coverage have been met. Moreover, State Farm admits that any distinction between a “replacement ear” and an “additional car” is immaterial to the issue raised in this case. We see no need to refer to either “replacement” car or “additional” car in our analysis; thus we refer to a “newly acquired car” when discussing the policy, and refer to “the Jeep” when being specific as to the vehicle coverage at issue in this case.
2. Principles of Insurance Contract Analysis
{11} The first question in analyzing an insurance policy is whether the policy is ambiguous. See Battishill v. Farmers Alliance Ins. Co.,
{12} When an ambiguity exists in the pertinent language of a policy, we look first to other terms of the policy in order to resolve the issue. Id. ¶ 20. If the ambiguity cannot be resolved by examining the other policy provisions, we look to extrinsic evidence, such as the premiums paid, the circumstances surrounding the agreement, the parties’ conduct, and the parties’ oral expressions of intent. Id. ¶ 21. Generally, ambiguities in an insurance policy are construed in favor of the insured and against the insurer, as a matter of public policy. Ponder v. State Farm Mut. Auto. Ins. Co.,
{13} While there is no language specifically describing the extent of coverage provided for a newly acquired car, the policy does provide direction in other areas. We review these provisions for assistance in resolving the ambiguity. See Rummel,
{14} We also look to the policy provision regarding trailer coverage because this language specifically informs the insured about coverage limits. As to covered trailers, the policy specifically provides that “[tjhese trailers are not described in the declarations and no extra premium is charged.” Under the limits of liability section, language in the policy provides that “[a] motor vehicle and attached trailer are one vehicle. Therefore, the limits are not increased.” Thus, the policy explicitly limits the coverage provided a trailer to the coverage provided by the vehicle to which the trailer is attached. State Farm contends that coverage for a newly acquired ear is similarly limited to the coverage provided by the named vehicle. The policy clearly informs the insured of the limitation on trailers; yet, the policy is silent regarding a comparable limitation on newly acquired ears.
{15} From our review of the policy, we find no additional provisions that address the coverage limits on newly acquired ears; therefore, the ambiguity remains unresolved. Accordingly, we now look to extrinsic evidence, including the premiums paid, the circumstances surrounding the agreement, the parties’ conduct, and the parties’ oral expressions of intent. See Rummel,
3. Extrinsic Evidence
a. Premiums Paid
{16} State Farm argues that because Parents had four policies and paid four premiums, Parents’ reasonable expectations have been met, since “they have received payment on the stacked coverages for which they have paid.” Each policy issued by State Farm named one vehicle, and one premium was paid for each policy. Although Parents were not charged an additional premium for the coverage extended to the Jeep under the Subaru policy, Mr. Goimarac testified in his deposition that coverage for a newly acquired car is built into the premium base paid for the named vehicle.
b. Circumstances, Conduct, and Oral Expressions of Intent
{17} First, we review the circumstances surrounding the agreement. The Bird family insured all of their vehicles with State Farm through Mr. Goimarac and had done so for many years. The Bird family has had a relationship with Mr. Goimarac for almost as long as he has been an insurance agent, which is twenty-six years. Over the years, Mr. Goimarac established a “trust relationship” with the Bird family. Before the Subaru was purchased, the Bird family insured four vehicles under four separate policies with State Farm, each of which provided UM coverage. The bill for the Bird family’s auto insurance, which was included with the bills for home and life insurance, was paid monthly by automatic draft from Mr. Bird’s checking account.
{18} Evidence of the parties’ conduct and of their oral expressions of intent is provided in the depositions of Mr. Goimarac and his associate and in Mr. Bird’s two affidavits. Mr. Goimarac’s associate, Sara Terneuzen, testified to the following facts in her deposition. When David purchased the Subaru, he spoke with Ms. Terneuzen to arrange for insurance. Although Ms. Terneuzen had no specific recollection of her conversation with David, she stated that generally, when someone calls and tells her that they have a new car and will be trying to sell the old one, she informs them of two options. An insured can make a change on the policy to add the new vehicle and thereby cover the old car for thirty days from the date of purchase of the new vehicle; if the car does not sell within thirty days, then the insurance company can “add it back on at that time.” In the alternative, if the insured thinks it will take longer than thirty days to sell the old car, it can be added on immediately. Ms. Terneuzen further stated that she did not recall discussing with David that one limitation of coverage covered both vehicles; nor did she recall discussing coverages with Mr. Bird. Finally, Ms. Terneuzen stated that David did not sign a rejection of UM coverage.
{19} In Mr. Bird’s first affidavit, he stated that David, through Mr. Goimarac, “set up the insurance on the Subaru so that both [vehicles] would be insured while [David] tried to sell the 1999 Jeep.” Mr. Bird also stated that it was his expectation that both of David’s cars, the Subaru and the Jeep, would be fully insured until the Jeep was sold and that State Farm would automatically debit his checking account for the cost of fully insuring both vehicles.
{20} In Mr. Goimarac’s deposition, he did not dispute Mr. Bird’s expectation that both the Subaru and the Jeep would be fully insured for thirty days. Mr. Goimarac stated that he informed Mr. Bird that the same coverage provided the Subaru would be extended to the Jeep for thirty days. Mr. Goimarac also stated that the Bird family had five insurance cards, two of which had the same policy number. He further stated that he ordinarily informs an insured that for thirty days, a new car will have “the exact same coverage” as the named vehicle on the policy. However, Mr. Goimarac also testified in his deposition that although both cars were covered, “they did not have an additional amount of insurance other than what was on that Subaru.” He further explained, “[T]he same insurance on the Subaru would have extended to the other vehicle, but you can’t collect the same amounts off of both vehicles at the same time.” Specifically, Mr. Goimarac observed that if multiple accidents occurred involving both vehicles, the limits of coverage would be the limits of the one policy — “only one [$]100,000 limit during that 30-day policy period.” He stated that he explained this to Mr. Bird by using “the exact words [he] would use with anybody, which [are ‘]you have coverage extended for a period of 30 days from the ... Subaru policy.[’]” Mr. Goimarac admitted that the limit of liability, as applied to both cars, is not explained in the policy and that any information in regard to this limit would have had to come from communications with his office. Finally, Mr. Goimarac testified that neither he nor Ms. Terneuzen discussed with the Bird family the difference in limits of liability for one policy versus two policies.
{21} In response to Mr. Goimarac’s deposition testimony, Mr. Bird filed a second affidavit. In this affidavit, Mr. Bird stated that he did not understand from Mr. Goimarac’s explanation, at the time the Subaru was insured, that the thirty-day extension of the Jeep’s coverage “was an extension of the same [Subaru] policy.” Mr. Bird had no recollection of Mr. Goimarac’s explaining the term “extended.” Moreover, according to Mr. Bird, the term “fully insured” was not explained to be “the same insurance coverage” as that provided for the named vehicle. Mr. Bird further stated that he did not “recall the policy that extended coverage on the Jeep being called replacement or extension” and that after he talked with Mr. Goimarac, Mr. Bird assumed that the policy “was additional coverage.” Finally, he said, “Based on the explanation to me, I expected full coverage meant just' that — the Subaru would have the same policy limits as the Jeep during the 30[-]day period[,] and I either had been or would be charged a premium for this additional coverage.”
4. Reasonable Expectations
{22} We cannot conclude that the foregoing facts — regarding the premiums paid, the circumstances surrounding the agreement, and the parties’ conduct and oral expressions of intent — support State Farm’s position. It is clear that State Farm intended one limit of coverage to apply to both cars; however, this intention was never communicated to the Bird family. See Phoenix Indem. Ins. Co. v. Pulis,
{23} State Farm argues that the reasonable expectations of the insured rest on the number of policies and the number of premiums, not on the number of vehicles insured. We are not persuaded by this argument. As observed earlier, Mr. Bird stated in his affidavit that he expected full coverage and that he expected that State Farm would automatically debit his account for any additional premium necessary to provide full coverage. Under these circumstances, we cannot say that the Bird family knew they had only paid four premiums for four coverages. Significant to this argument is Mr. Goimarac’s testimony that the premium base was calculated by considering the coverage provided for newly acquired cars and that such coverage was therefore part of the premium base that had already been paid. Cf. Montaño,
{24} Our conclusion that payment of separate premiums is not determinative in our case is supported by the Missouri Court of Appeals decision in Oliver v. Cameron Mutual Insurance Co.,
{25} State Farm also argues that a change to a policy, such as an addition of a newly acquired car, “does not create a new policy!,] but rather constitutes a continuation of the old policy.” In making this assertion, State Farm relies on Vigil v. Rio Grande Insurance of Santa Fe,
{26} Finally, State Farm relies on Rehders,
B. Double Costs, Attorney Fees, and PreJudgment Interest
{27} The trial court awarded costs of $613.62 to Parents but denied their motions for pre-judgment interest and attorney fees. Parents challenge the court’s rulings on these motions. We review the court’s determinations regarding costs, attorney fees, and pre-judgment interest pursuant to Section 56-8-4 for abuse of discretion. See § 56-8-4(B) (“[T]he court in its discretion may allow interest of up to ten percent from the date the complaint is served[.]”); Nava v. City of Santa Fe,
1. Double Costs
{28} Parents argue that the trial court erred because it did not double the costs they incurred in prevailing below. When a claimant makes a settlement offer, Rule 1-068(A) NMRA provides for recovery of “double the amount of costs incurred after the making of the offer” if the offer is rejected and if the claimant thereafter obtains a judgment more favorable than the settlement offer. On November 29, 2005, Parents made an offer of judgment for $97,500. The trial court entered judgment on April 4, 2006, for $100,000 coverage, plus $613.62 in costs. Parents were therefore entitled to an award of double the costs incurred after the offer was made.
{29} Parents submitted a bill of costs for $486.82, which included a filing fee and a service fee, paid in January 2005, as well as costs incurred in conducting two depositions, one on October 19, 2005, and another on January 16, 2006. The exact date that the offer was made is unclear from the record. State Farm contends that service was on December 28, 2005. The offer of judgment was filed December 28, 2005. Therein, Parents’ counsel certified that the offer was mailed to State Farm on November 29, 2005. Under the facts, however, the exact date that the offer was made is not important. If we assume that the offer of judgment was made on November 29, 2005, Parents’ only cost incurred after November 29 was for the second deposition, which was $126.80. Thus, it appears that the trial court awarded Parents the costs submitted, and it properly doubled the cost of the deposition taken after the settlement offer was made. Subtracting the bill of costs submitted, $486.82, from the costs awarded, $613.62, leaves a total of $126.80, which was the cost of the second deposition. We therefore conclude that the trial court did not err in awarding costs when it awarded the total costs submitted, as well as doubling the cost of the second deposition.
2. Attorney Fees
{30} Parents argue that the trial court erred when it denied their motion for attorney fees, made pursuant to NMSA 1978, § 39-2-1 (1977). The trial court may, in its discretion, award attorney fees to a prevailing party under Section 39-2-1, which provides that an insured person may be awarded attorney fees when the court finds “that the insurer acted unreasonably in failing to pay the claim.”
{31} In our case, the trial court expressly found that there was no indication State Farm had acted in bad faith or unreasonably in failing to pay the claim. Parents argue that it was unreasonable for State Farm to create an expectation of full coverage and then deny Parents’ claim after the loss of their son. See United Nuclear Corp. v. Allendale Mut. Ins. Co.,
3. Pre-Judgment Interest
{32} Parents argue that the trial court erred when it did not award them pre-judgment interest pursuant to Section 56-8-4(B). Parents contend that the trial court erred because they did not delay the case and because State Farm has made no offer of settlement. In addition, Parents argue that State Farm’s actions were selfish and unreasonable, in that it “drafted a contract of insurance which does not include exclusions [State Farm] seek[s] to read into it.”
{33} “[T]he purpose of Section 56-8-4(B) is to foster settlement and prevent delay.” Gonzales,
{34} Abeita v. Northern Rio Arriba Electric Cooperative,
{35} In our case, the trial court found no indication that State Farm acted unreasonably or in bad faith in failing to pay the claim. We can infer from this finding that the court below did not believe that State Farm was a source of unreasonable delay. Moreover, oral statements by the court indicate that it faced difficult legal issues, which could preclude settlement. Parents have pointed out no evidence to the contrary and do not argue that State Farm has engaged in dilatory tactics. Under these facts, the purposes of the statute would not be served by assessing pre-judgment interest. Thus, we conclude that the trial court did not abuse its discretion when it denied Parents’ motion for pre-judgment interest.
C. Post-Judgment Interest
{36} The trial court awarded post-judgment interest at a rate of 15%. Post-judgment interest is awarded from the date of entry of the judgment at the rate of 8.75% interest, unless (1) a contract provides a different rate of interest or unless “(2) the judgment is based on tortious conduct, bad faith or intentional or willful acts, in which case interest shall be computed at the rate of fifteen percent.” Section 56-8-4(A); see also Sunwest Bank,
{37} In the present case, the trial court reasoned that the judgment was based on the tortious conduct of the uninsured driver and that because the purpose of the UM statute is to put the insured in the same position in which he or she would have been had the tortfeasor had liability insurance, the insurer should be held liable for any interest that could have been imposed on the tortfeasor. The court relied on Stewart v. State Farm Mutual Automobile Insurance Co.,
{38} State Farm contends that the trial court erred in determining that the rate of post-judgment interest in this case is 15%, since the judgment was based on an insurance policy, which is a written instrument. State Farm argues that the exceptions to the 8.75% rate of interest do not apply because the policy does not specify a different rate of interest, the judgment does not arise in tort, and the trial court specifically found that State Farm did not act in bad faith. State Farm relies on Diamond D,
{39} We begin our analysis with Teague-Strebeck,
{40} Like the trial court in Teague-Strebeck, the trial court in our case awarded damages based on the insurance contract— $100,000 in UM coverage. See
{41} Parents distinguish Teague-Strebeck by arguing that UM benefits “are based on tortious conduct (herein the willful and wanton acts of a drunk driver), and not the contract of insurance.” See generally Diamond D,
{42} We cannot agree. We do not believe that the legislature intended to hold insurance companies liable for 15% interest on a judgment, above and beyond the recovery limits of the policy, based on the tortious conduct of the tortfeasor. See Stewart,
III. CONCLUSION
{43} We conclude that the insurance policy is ambiguous in regard to the limits of coverage on a newly acquired car and that the insured reasonably expected UM coverage on the Jeep to be separate and apart from coverage on the Subaru, which was the named vehicle. Thus, we affirm the trial court’s grant of summary judgment in favor of Parents. We also conclude that the trial court did not err when it awarded costs and when it denied Parents’ motions for attorney fees and pre-judgment interest; thus, we affirm on those matters. Finally, we conclude that the trial court’s judgment was grounded in contract; thus, the court below erred in awarding post-judgment interest at 15%. Accordingly, we reverse the trial court’s post-judgment order awarding 15% interest, and we remand for entry of an order consistent with this opinion.
{44} IT IS SO ORDERED.