Supremes rule Nebraska insurers must pay underinsured motorist claims, but dismiss "nofault" and "med-pay" claims in Colorado accident

Gregory F. Johnson, appellant, v. United States Fidelity and Guaranty Company, nka St. Paul Fire and Marine Insurance Company, and Employers Mutual Casualty Company, (Johnson v. Unites States Fidelity & Guar. Co.) 269 Neb. 731 May 6, 2005. No. S-03-748.

Nebraska resident with Nebraska auto insurance coverage was rear ended while a passenger in a Colorado vehicle in the Denver area. When the accident occurred in 1993 Colorado law capped underinsured motorist payments to “gap” between the maximum UIM coverage available less any payments the plaintiff had already received from liability insurance and other UIM policies. Nebraska’s underinsured motorist law was similar until 1991. Then Nebraska made underinsured motorist coverage more beneficial to Plaintiffs when it required UIM to make up for the shortfall of liability insurance in compensating for a plaintiff’s injuries. Currently underinsured motorist will pay on top of liability insurance payments, up to the maximum coverage available under any applicable policy.

“Personal Injury Protection” or PIP functioned as immediate compensation available to persons injured in Colorado auto accidents. Recently Colorado phased out its no fault auto insurance law and has reverted to a fault based system.

The Nebraska Supreme Court held that Nebraska law applied to the Colorado accident with regard to the underinsured motorist coverage. The Nebraska resident would get a second helping of PIP coverage from his Nebraska insurer under either state’s systems. The Court noted that the Brown vehicles insurance USFG already paid PIP to him. Colorado law determined that only that Colorado insurance policies required PIP benefits and the Nebraska policies would provide any coverage “required of out-of-state vehicles by the jurisdiction where the covered ‘auto’ is being used.” Maybe if the Plaintiff had been a passenger in his own automobile in Colorado when the accident occurred he would have had a shot at two PIP policies.