Background
Brittney Best and Jeffrey Schooley’s seventeen-year-old son, Jaxson, died after an oncoming driver crossed the center line and struck the car in which he was riding. Best and Schooley were never married. The at-fault driver’s State Farm policy carried a $100,000 per-person bodily-injury limit. State Farm paid that full amount, dividing it equally between the parents: $50,000 to Best and $50,000 to Schooley.
Two other policies potentially covered the loss. Best’s husband held a Travelers policy covering Best and Jaxson, and the car carrying Jaxson was insured by AAA. Each policy provided underinsured-motorist coverage, commonly called UIM coverage, with a $100,000 per-person limit. UIM coverage supplies compensation when liability insurance available from an at-fault driver is less than the applicable UIM limit. Because Best personally received only $50,000 from State Farm, she sought the remaining $50,000 from Travelers and AAA.
The insurers denied the claims and moved to dismiss Best’s lawsuit. They maintained that the relevant comparison was between their $100,000 UIM limits and the total $100,000 State Farm paid for Jaxson’s death. Best sought partial summary judgment, arguing that Indiana’s UIM statute instead required comparison with the $50,000 actually available to her. The Tipton Circuit Court accepted the insurers’ aggregate-payment theory, denied Best’s motion, and dismissed the complaint.
The Court’s Holding
The Indiana Court of Appeals reversed and ordered partial summary judgment for Best. Judge Vaidik relied on Indiana Code section 27-7-5-4(b), which defines an underinsured vehicle by comparing liability coverage “available for payment to the insured” with the insured’s UIM limits. Under the Indiana Supreme Court’s decisions in Corr v. American Family Insurance and Lakes v. Grange Mutual Casualty Co., that comparison turns on what the claimant actually received, not the tortfeasor policy’s overall limit or the aggregate amount distributed to multiple claimants.
Best was the relevant insured and claimant. The $50,000 State Farm paid her was less than each policy’s $100,000 UIM limit, so the tortfeasor’s vehicle was underinsured. The panel rejected the argument that Jaxson should be treated as the relevant insured and that both parents’ payments should be combined. Corr itself involved divorced parents who separately recovered for a child’s death, yet the Supreme Court measured each parent’s individual recovery against that parent’s UIM coverage.
The court also distinguished an earlier Court of Appeals decision involving the Child Wrongful Death Act. That Act governs the parents’ claim against the person responsible for a child’s death, but Best’s suit against her own UIM carriers sounded in contract. She did not seek separate per-person limits for two parents under a shared policy; she sought only the unpaid portion of one $100,000 limit. The panel acknowledged insurers’ concern that allocations among multiple beneficiaries can create UIM exposure, but noted that Corr had accepted that possibility as a consequence of the legislature’s remedial, full-recovery approach. Best is entitled to $50,000 in UIM benefits, while the trial court must decide on remand how Travelers and AAA will apportion that amount.
Key Takeaways
- Indiana determines whether a vehicle is underinsured by comparing the amount the individual claimant actually received with the applicable per-person UIM limit.
- Liability payments to another wrongful-death beneficiary are not automatically aggregated with the claimant’s payment for this statutory comparison.
- A UIM contract action against an insurer is distinct from the joint claim against a tortfeasor authorized by Indiana’s Child Wrongful Death Act.
- When multiple UIM policies potentially respond, establishing coverage does not necessarily resolve allocation; the responsible shares may remain for further proceedings.
Why It Matters
The decision gives Indiana coverage lawyers a direct rule for evaluating UIM claims after a limited liability fund is divided among family members or other claimants. The analysis should begin with the dollars actually available to the insured making the UIM demand. Comparing only policy declarations or the total settlement can wrongly eliminate coverage even when the claimant remains below the purchased UIM limit.
For insurers, the opinion separates the threshold coverage question from later disputes over priority or contribution among carriers. For claimant’s counsel, it underscores the importance of documenting settlement allocations and identifying every policy under which the claimant qualifies as an insured. In child-death cases, practitioners should also keep the statutory wrongful-death cause of action distinct from contractual rights under a household or vehicle policy.