Farmers Insurance Exchange v. Kretzer.
2023 COA 94. No. 22CA1804. Motor Vehicles—Automobile Insurance Policies—Uninsured/Underinsured Coverage—Named Driver Exclusion.
October 5, 2023
Farmers Insurance Exchange (Farmers) issued an auto insurance policy for Alicia and Nathan Kretzer. After underwriting issues arose, Nathan modified the policy to maintain coverage for himself but signed a “Named Driver Exclusion Endorsement” that excluded Alicia from all coverage (the renewed policy). The renewed policy provides Nathan with liability coverage, uninsured and underinsured (UM/UIM) coverage, and Medpay coverage. After Nathan signed the exclusion endorsement and purchased the renewed policy, Alicia was involved in a car crash while driving her separately insured vehicle. Alicia sustained serious injuries and substantial medical bills. She received the policy limit from the tortfeasor’s liability insurer, but the tortfeasor was underinsured and his policy covered only a small portion of Alicia’s total damages. The Kretzers made a claim against Farmers under Nathan’s policy for UM/UIM and Medpay benefits for Alicia. Farmers denied the request and filed a complaint for a declaratory judgment that the exclusion endorsement precluded Alicia from all coverage. On cross-motions for summary judgment, the district court granted summary judgment in favor of Farmers and denied the Kretzers’ cross-motion.
On appeal, the Kretzers contended that the district court erred by granting summary judgment in favor of Farmers because the insurance policy, when taken as a whole, is ambiguous as to the scope of the exclusion endorsement. However, the exclusion endorsement unambiguously excludes Alicia from all coverage and modifies the entire policy. Viewing the modified policy as a whole, it cannot be interpreted as limiting this exclusion.
The Kretzers also argued that the district court erred by granting summary judgment for Farmers because CRS §10-4-630(2) limits insurers by allowing them to deny UM/UIM and Medpay benefits only when a named excluded driver operates a vehicle listed in the insurance policy. They maintained that because Alicia wasn’t driving a vehicle listed on the Declaration Page at the time of the collision, Farmers could not exclude her from the policy’s UM/UIM and Medpay coverage. However, the Kretzers’ statutory interpretation would lead to an absurd result because it would allow an insurer to deny coverage if the driver were operating an insured vehicle but would require coverage if the driver were operating any other vehicle. Further, the driver exclusion does not impermissibly avoid statutorily mandated UM/UIM and Medpay coverage and is thus not void.
The order was affirmed.