 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
Allstate Insurance Co. v. Avis Rent-A-Car System Inc11/10/1997
p; Marine, 764 P.2d 1191, 1199 (Colo. 1988); see also Brna v. Farmers Ins. Exchange, 897 P.2d 851, 854 (Colo. App. 1994); Allstate Ins. v. Frank B. Hall & Co., 770 P.2d 1342, 1345 (Colo. App. 1989).
We need not take sides in this "contest between insurance companies" where each side seeks to compel the other to pay first. Continental Cas Co. v. Weekes, 74 So. 2d 367, 369 (Fla. 1954). As the Supreme Court of New Jersey observed, the question of whether the particular insurance is primary or excess "is not a public matter but merely a concern of the insurance companies which have extended coverage to the risk." Cosmopolitan Mut. Ins. Co. v. Continental Cas. Co., 147 A.2d 529, 534 (N.J. 1959).
When insurers compete against each other to trump the other's excess clause they undermine the fundamental purposes of CAARA. The first purpose of CAARA is to avoid inadequate compensation to victims of automobile accidents; the second is to require registrants of motor vehicles in the state to procure insurance covering legal liability for owned automobiles; the third is to provide benefits to vehicle occupants and others who are injured. (s) 10-4-702, 3 C.R.S. (1997). In each of these purposes, CAARA contemplates that insurers will act quickly and fairly to provide compensation for the loss so that delayed payment and continued uncertainty will not prolong the travail of both the injured and the insured parties. Excess clauses that give rise to disputes between insurers frustrate prompt payment of claims, contrary to CAARA.
Under the circumstances here, we look to the reasonable expectation of the insured in operating the rental car that the Avis and Allstate policies would be effective in responding immediately, fairly, and jointly to cover the loss up to the total combined limit of the two policies. Given CAARA's goals and absent an applicable statutory provision or other compelling public policy basis, we refuse to elevate one excess clause above the other. We hold that both policies were in effect and that the actual loss must be shared between them on a co-primary basis. Each insurer must pay up to the full limit of its separate policy to the extent necessary to fully compensate the loss.
C.
Apportionment
When conflicting excess clauses are inoperative, the loss must be apportioned between the insurers. See Empire Cas., 764 P.2d at 1199; Allstate Ins. v. Frank B. Hall Co., 770 P.2d at 1347; Universal Underwriters, 657 P.2d at 580. Three methods exist for apportionment between co-primary insurers: (1) proration in accordance with the proportionate policy limits of the respective policies (method one); (2) apportionment on an equal basis up to the applicable policy limits (method two); and (3) apportionment based on the loss which each insurer would sustain without the other (method three). See Empire Cas., 764 P.2d at 1199-1200. The Allstate policy states that it will "bear our proportionate share with other collectible liability insurance" when more than one policy applies on a primary basis.
We hold that Colorado public policy favors and requires the second method for apportionment: apportionment on an equal basis up to the policy limit of each policy. Though method one is the majority rule, other states have recently recognized that method two is superior because it is easy to administer, comports with Justice, and more correctly approximates the coverage contemplated by each insurer. See Universal Underwriters, 657 P.2d at 581-82; Carriers Ins. Co. v. American Policyholders' Ins. Co., 404 A.2d 216, 221-22 (Me. 1979).
The majority rule, which apportions the loss in proportion to the respective policy limits, has b
Page 1 2 3 4 5 6 Colorado Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|