Barriere did not meet this requirement for its UM coverage, since it elected to only maintain $20,000 worth of UM coverage in its policy with National. This court addressed an identical issue in the case of Washam v. Chancellor, 507 So.2d 806 (La. 1987). In that case, plaintiff's employer selected lower limits in its underlying policy than those required by the excess policy.
Because Underwriters is only liable for the amount in excess of $500,000, there is no primary coverage available to plaintiff between $10,000 and $500,000. Washam v. Chancellor, 507 So.2d 806 (La. 1987). Since Bellefonte and Underwriters essentially provide only one coverage, that is coverage on the Sims' automobile in differing amounts, Elizabeth Mohr is entitled to recover under her own uninsured motorist policy any excess over and above that primary coverage.
If we were able to write on a blank slate, Allstate's argument that the Murphys should be held to the implications of their choice to purchase lower coverage limits of $15,000/$30,000 in their automobile liability policy has considerable force. See, e.g.,Washam v. Chancellor, 507 So.2d 806 (La.1987). While not specifically mentioning uninsured/underinsured motorist coverage, Allstate's policy provided that the Murphys had to maintain bodily injury coverage in their automobile liability policy of $100,000.
Defendant maintains that Louisiana courts have consistently held that umbrella and excess insurance policies which include the same language as the Lexington Policy do not drop down in coverage. Plaintiffs counter that the lead Louisiana case relied on by Lexington, Washam v. Chancellor, 507 So.2d 806 (La. 1987), did not involve a signed written waiver of UM/UIM coverage in the umbrella policy, unlike the Lexington Policy; and (2) the Lexington Policy's Insuring Agreement is ambiguous and creates an alleged impossibility because the “Insured” cannot become legally obligated to pay damages in the context of statutorily mandated UM/UIM coverage.
The Court agrees. See Hayes v. De Barton, 211 So. 3d 1275 (La. App. 3d Cir. 2017); Washam v. Chancellor, 507 So. 2d 806 (La. 1987); Sacks v. Allstate Prop. & Casualty Ins. Co., No. 16-16578, 2018 WL 1409269 (E.D. La. Mar. 21, 2018); Tijerina v. Stawecki, et al., 670 So. 2d 792 (La. App. 3d Cir. 1996). Once an insurer signs and completes a UM waiver form, the burden shifts to the insured to prove that they did not knowingly select lower coverage.
Under Condition P, absence of the requisite underlying insurance limited coverage to the excess over $500,000 up to $1.5 million in recoverable damages. See Washam v. Chancellor, 507 So.2d 806 (La. 1987), and Thibodeaux v. Burton, 538 So.2d 1001 (La. 1989). Condition P also preserved the umbrella coverage if the underlying insurance was with an unnamed company or was nonexistent.
Under Condition P [the "failure to maintain" clause], absence of the requisite underlying insurance limited coverage to the excess over $ 500,000 up to $ 1.5 million in recoverable damages. See Washam v. Chancellor , 507 So.2d 806 (La. 1987), and Thibodeaux v. Burton , 538 So.2d 1001 (La. 1989). Condition P also preserved the umbrella coverage if the underlying insurance was with an unnamed company or was nonexistent.
Liberty Mutual's excess policy, thus, provides U/M coverage to Alamo. However, in Washam v. Chancellor, 507 So.2d 806 (La. 1987), the Louisiana Supreme Court held before an excess policy providing for U/M coverage is available the limit of the underlying policy must be exhausted. The trial court correctly held Liberty Mutual's excess policy does not provide coverage until there is an award in excess of $1,000,000.
A policy expressly providing automobile liability coverage only in excess of required underlying coverage affords UM coverage only in excess of that same amount. Mohr v. State Farm Insurance Company, 528 So.2d 144 (La. 1988); Washam v. Chancellor, 507 So.2d 806 (La. 1987); Lindsey v. Poole, 579 So.2d 1145 (La.App. 2d Cir. 1991), writ denied, 588 So.2d 100 (La. 1991); Dupree v. Hill, 530 So.2d 1226 (La.App. 2d Cir. 1988). The vehicle driven by Mosley was insured by Southern American in the form of commercial umbrella liability coverage with a policy period of June 1, 1985, to June 1, 1986.
This theory is not followed in those cases which distinguish between the obligation of primary and excess carriers. In Washam v. Chancellor, 507 So.2d 806 (La. 1987), the Louisiana Supreme Court held that the threshold for an umbrella policy to take effect, relative to its UM coverage, is the $500,000 limit of the underlying liability policy which was a condition of the umbrella policy terms. In that case, because the insured elected to reduce his UM coverage limits from $500,000 to $10,000, there was a gap in coverage which the excess carrier was not obligated to fill.