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Shepherd v. Fregozo6/13/2005
y is consistent with the language, intent, and public policy considerations of § 10-4-609, C.R.S. 1999. We conclude that it is.
Section 10-4-609 states, in pertinent part:
No automobile liability or motor vehicle liability policy . . . shall be delivered or issued . . . unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in, section 42-7-103(2), C.R.S., under provisions approved by the 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 therefrom; except that the named insured may reject such coverage in writing.
The intent of the statute is to compensate innocent insureds for losses caused by financially irresponsible drivers. However, underinsured motorist coverage is not mandatory, and individual insureds are free to decline such coverage. See State Farm Mutual Automobile Ins. Co. v. Nissen, supra. Further, the statute does not require full indemnification of losses suffered at the hands of underinsured motorists under all circumstances. Rather, it intends to put a person injured by an underinsured motorist in the same position as one injured by a tortfeasor insured in compliance with the law. See Terranova v. State Farm Mutual Insurance Co., supra.
Thus, under § 10-4-609(1), insurers are required to offer uninsured/underinsured motorist coverage to a class of individuals coextensive with the class covered by the liability provision of the respective policy. See Aetna Casualty & Surety Co. v. McMichael, 906 P.2d 92 (Colo.1995).
Here, plaintiff's policy contains the same "regular use" exclusion in both the liability and uninsured/underinsured sections of the policy. Thus, the same classes of people are provided coverage under both provisions to the same extent.
Plaintiff relies upon cases from other jurisdictions holding that similar exclusions violate public policy. See, e.g., State Farm Mutual Automobile Insurance Co. v. Duran, 163 Ariz. 1, 785 P.2d 570 (1989). However, those cases are inapposite. They deal with statutes and public policies that differ from those in Colorado.
We therefore conclude that the "regular use" exclusion in the uninsured motorist coverage of plaintiff's policy does not offend public policy. See Williams-Diehl v. State Farm Fire & Casualty Co., 793 P.2d 587 (Colo.App.1989); see also Urtado v. Shupe, supra ("drive other car" exclusions in the liability coverage portion of insurance policies do not violate public policy).
Cruz v. Farmers Ins. Exchange, 12 P.3d 307, 312 (Colo.App.2000).
In Jaimes v. State Farm Mut. Auto. Ins. Co., 53 P.3d 743 (Colo.App.2002), the Colorado Court of Appeals faced an exclusion providing:
THERE IS NO COVERAGE
2. FOR BODILY INJURY TO AN INSURED:
a. WHILE OCCUPYING, OR
b. THROUGH BEING STRUCK BY A MOTOR VEHICLE OWNED BY YOU, YOUR SPOUSE OR ANY RELATIVE IF IT IS NOT INSURED FOR THIS COVERAGE UNDER THIS POLICY.
The Court first determined that the exclusion was valid, but on grant of certiorari by the supreme court, the case was remanded for reconsideration in the light of DeHerrera v. Sentry Ins. Co., 30 P.3d 167 (Colo.2001).
The Court of Appeals then concluded that the exclusion was void as against public policy:
We first address the "owned but not insured under this policy" exclusion as applied to UM/UIM coverage and conclude that the exclusion is contrary to the public policy of Colorado and thus vo
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