Christina School District moved for summary judgment, claiming that the underinsured motorist insurance provided by Aetna should be primary rather than the insurance provided by the policy maintained by the School District. In support of its position, the School District urged the Court to follow the reasoning of the Delaware Court of Chancery in its decision in Jeanes v. Nationwide Insurance Co., 532 A.2d 595 (Del.Ch. 1987), the decision upon which Harleysville relies in this case. Jeanes, in ruling on another issue, noted in dicta that in a case where a person was injured while driving another person's automobile, "the primary liability would be on the insurer of the operator in the case of a standard automobile policy. . . ."
This particular reducing clause has been construed by the Delaware Chancery Court to be invalid and void as against public policy, at least when applied to the receipt of worker's compensation benefits. See Jeanes v. Nationwide Ins. Co., Del. Ch., 532 A.2d 595, 600 (1987). Whether the remainder of the clause is also void, however, is a question that the Court does not have to reach because it is clear that the language "workmen's compensation, disability benefits, or similar laws" unambiguously refers to payments received or receivable under some sort of statutory mandate and not an employer's voluntary group health plan.
In Jeanes v. Nationwide Ins. Co., the Court of Chancery held that an insurance policy excluding coverage when the insured was "carrying passengers for a fee" (the insured was injured while driving a DART bus) was invalid because UM coverage is designed to be personal to the insured and not restricted to a certain vehicle.See Jeanes v. Nationwide Ins. Co., 532 A.2d 595, 598-599 (Del.Ch. 1987).Jeanes v. Nationwide Ins. Co., 532 A.2d 595 (Del.Ch. 1987).
Delaware courts consistently have struck down restrictions on UM coverage. See e.g., Frank v. Horizon Assur. Co., 553 A.2d 1199, 1205 (Del. 1989) (invalidating other motor vehicle exclusion barring UM coverage for claim involving owned vehicle not listed as covered vehicle); State Farm Mut. Auto. Ins. Co. v. Abramowicz, 386 A.2d 670 (Del. 1978) (declaring void policy provision requiring physical contact to trigger UM coverage in "hit-and-run" situation); Jeanes v. Nationwide Ins. Co., 532 A.2d 595 (Del.Ch. 1987) (invalidating exclusion barring UM coverage for motor vehicles used for fee). The Frank court held that once UM coverage is purchased, the insured is entitled to the full amount of protection under the statute and any attempts by insurers to reduce the coverage by exclusion clauses are repugnant to the public policy of protecting persons injured in automobile accidents. 553 A.2d at 1205.
Those sections in the statute only authorize a set-off or reduction (exhaustion) of other insurance coverage against the full amount of damages for bodily injury that could be legally recovered by the claimant from the tortfeasor. Frank v. Horizon Assur. Co., 553 A.2d 1199; State Farm Mut. Auto. Ins. Co. v. Abramowicz, 386 A.2d 670; Jeanes v. Nationwide Ins. Co., Del. Ch. , 532 A.2d 595, 599-600 (1987). See also Adams v. Delmarva Power Light Co., 575 A.2d 1103.
This issue has been addressed by a number of jurisdictions and the overwhelming majority have held such policy provisions invalid. See State Farm Mutual Auto. Ins. Co. v. Cahoon, 287 Ala. 462, 252 So.2d 619 (1971); State Farm Mutual Auto. Ins. Co. v. Karasek, 22 Ariz. App. 87, 523 P.2d 1324 (1974); Travelers v. National Farmers Union Prop. Cas. Co., 252 Ark. 624, 480 S.W.2d 585 (1972); Nationwide Mut. Ins. Co. v. Hillyer, 32 Colo. App. 163, 509 P.2d 810 (1973); Jeanes v. Nationwide Ins. Co., 532 A.2d 595 (Del.Ch. 1987); Leist v. Auto Owners Ins. Co., 160 Ind. App. 322, 311 N.E.2d 828 (1974); Fryer v. National Union Fire Ins. Co., 365 N.W.2d 249 (Minn. 1985); Cano v. Travelers Ins. Co., 656 S.W.2d 266 (Mo. 1983); Sullivan v. Doe, 159 Mont. 50, 495 P.2d 193 (1972); Merchants Mut. Ins. Group v. Orthopedic Professional Assoc., 124 N.H. 648, 480 A.2d 840 (1984); Sweeney v. Hartford Accident Indem. Co., 136 N.J. Super. 591, 347 A.2d 380 (1975); Bartlett v. Nationwide Mut. Ins. Co., 33 Ohio St.2d 50, 294 N.E.2d 665 (1973); Chambers v. Walker, 653 P.2d 931 (Okla. 1982); Peterson v. State Farm Mut. Auto. Ins. Co., 238 Or. 106, 393 P.2d 651 (1964); Selected Risks Ins. v. Thompson, 520 Pa. 130, 552 A.2d 1382 (1989); Aldcroft v. Fidelity Cas. Co., 106 R.I. 311, 259 A.2d 408 (1969); Ferguson v. State Farm Mut. Auto. Ins. Co., 261 S.C. 96, 198 S.E.2d 522 (1973); Thamert v. Continental Cas. Co., 621 P.2d 702 (Utah 1980); Allstate Ins. Co. v. Welch, 45 Wn. App. 740, 727 P.2d 268 (1968); Niemann v. Badger Mut. Ins
He contends that "the purpose of [the uninsured motorist provision] is . . . to provide protection to innocent victims of motor vehicle accidents, rather than the protection of insurance companies from alleging unascertainable risks." He recognizes that there is no case authority in this jurisdiction on this issue and relies on Jeanes v. Nationwide Ins. Co., 532 A.2d 595, 596-99 (Del.Ch. 1987), which held that uninsured motorist coverage is personal and travels with the insured "wherever he goes. . . ." We conclude that this authority should not be followed for several reasons.
This issue has been addressed in a number of jurisdictions, and the overwhelming majority of these jurisdictions have held that such a policy provision is invalid. See e.g. State Farm Mutual Automobile Insurance Company v. Cahoon, 287 Ala. 462, 252 So.2d 619 (1971); State Farm Mutual Automobile Insurance Company v. Karasek, 22 Ariz. App. 87, 523 P.2d 1324 (1974); Travelers v. National Farmers Union Property and Casualty Company, 252 Ark. 624, 480 S.W.2d 585 (1972); Nationwide Mutual Insurance Company v. Hillyer, 32 Colo. App. 163, 509 P.2d 810 (1973); Jeanes v. Nationwide Insurance Company, 532 A.2d 595 (Del. Ch. 1987); Leist v. Auto Owners Insurance Company, 160 Ind. App. 322, 311 N.E.2d 828 (1974); Cano v. Travelers Insurance Company, 656 S.W.2d 266 (Mo. 1983); Bartlett v. Nationwide Mutual Insurance Company, 33 Ohio St.2d 50, 294 N.E.2d 665 (1973); Chambers v. Walker, 653 P.2d 931 (Okla. 1982); Peterson v. State Farm Mutual Automobile Insurance Company, 238 Or. 106, 393 P.2d 651 (1964); Aldcroft v. Fidelity and Casualty Co., 106 R.I. 311, 259 A.2d 408 (1969); Thamert v. Continental Casualty Company, 621 P.2d 702 (Utah 1980). The rationale of these courts is varied but certain common themes emerge: first, uninsured motorist coverage is paid for by a separate premium, and to give the uninsured motorist carrier a set-off based on the fortuitous existence of a collateral source would result in a windfall to the carrier; second, uninsured motorist coverage is mandated by statute and any variations from that statutory mandate should come from the legislature; third, workmen's compensation only covers
tate Farm Mutual Auto. Ins. Co. v. Abramowicz, 386 A.2d 670, 673-74 (Del. 1978) (finding that an "arbitrary physical contact requirement may not be used to frustrate the intent of ยง 3902 to provide relief to all insureds for damages suffered as a result of unlawful contact by the uninsured or unknown tortfeasor"); Frank v. Horizon Assurance Co., 553 A.2d 1199,1205 (Del. 1989) (finding that an "other motor vehicle" provision disclaiming coverage for injury or damage from incidents involving vehicles owned by the insured but not insured by the insurer as inimical to the purchase of underinsured motorist coverage); State Farm Mutual Auto. Ins. Co. v. Washington, 641 A.2d 449, 453 (1994) (finding an insurer could not deny an insured's son underinsured motorist coverage based on a named driver exclusion where the son was a passenger in a vehicle "because of the strong public policy of this State in favor of underinsured motorist coverage, and against any limitations upon such protection"); Jeanes v. Nationwide Ins. Co., 532 A.2d 595, 596 (Del. Ch. 1987) (declining to give effect to a policy provision precluding "uninsured motorist coverage as to any accident occurring during the use of any vehicle by the insured to carry persons or property where the insured receives a fee"). In Adams v. Delmarva Power & Light Co., cited by State Farm for the premise that parties to an insurance policy are free to contract as long as their agreement is not inconsistent with a statutory provision or public policy, the Supreme Court quoted its own language: "When a motorist who carries full uninsured/underinsured coverage takes to the highways, he knows that a certain amount of protection will always be available."
Washington, 641 A.2d at 451; see State Farm Ins. Co. v. Washington, 1993 WL 1626510 (Del. Super. June 29, 1993) aff'd sub nom. State Farm Mut. Auto. Ins. Co. v. Washington, 641 A.2d 449 (Del. 1994) (citing Jeanes v. Nationwide Insurance Company, 532 A.2d 595, 598 (Del. Ch. 1987) (holding that uninsured coverage is required regardless of whether insured is driving her own vehicle or another's)). Since the statute requires that UM coverage be provided upon the issuance of an insurance policy which, for rental vehicles, occurs at the time of contract, a determination as to where a rental vehicle is principally garaged is made by ascertaining such at the time of contract and not at the time of a subsequent accident.