Mississippi Supreme Court Rejects Call To Overrule Precedent Establishing Principles Of Offset In Uninsured Motorist Coverage Claims

The Mississippi Supreme Court reversed a trial court’s finding that a secondary insurer in an uninsured motorists litigation was entitled to a pro-rata offset of liability proceeds rather than applying the general rule that first offsets the primary insurer’s entire stacked policy amounts. Viking Ins. Co. of Wisconsin v. Mississippi Farm Bureau Casualty Ins. Co., No. 2020-CA-00836-SCT, 2021 WL 4097758 (Miss. Sept. 9, 2021). 

The insured was involved in a vehicular accident and had coverage under two separate policies.  The first policy covered two vehicles, one of which was involved in the accident, and provided $50,000 in uninsured motorists coverage. The second policy, which also provided $50,000 in uninsured motorist benefits, covered two other vehicles, neither was involved in the accident.  The insured received compensation from the other driver’s insurer and demanded uninsured benefits from both insurers. The insurer issuing the policy that did not cover the vehicle involved in the accident tendered roughly $33,000 and then sought declaratory relief from the insurer that did, claiming entitlement to two-thirds of the liability proceeds received by the insured based on its coverage of two of the three insured vehicles not involved in the accident. The insurer covering the vehicle involved argued that because it insured the vehicle actually involved in the accident, it was considered the primary insurer, and was thus entitled to an offset of its entire uninsured motorists’ obligations first. The trial court found that the insurer covering the vehicle involved in the accident was entitled to $25,000 in offset for the insured vehicle involved in the accident. It then pro-rated the remaining $25,000 in liability proceeds against the insured’s remaining $75,000 of personal uninsured motorists’ coverage. 

The Mississippi Supreme Court rejected the trial court’s pro-rata approach. Relying on Mississippi jurisprudence, the Court reaffirmed its general rule that the primary insurer in an uninsured motorist litigation depends on which policy covered the vehicle involved. Rejecting the call to overrule precedent in favor of a pro-rata approach, the Court reversed and rendered judgment.