Maureen Johnson v. Safeco Insurance Company of Illinois

Summary

The Eighth Circuit held that Safeco's underinsured motorist (UIM) policy unambiguously precluded stacking of UIM coverage from multiple insurers. The "Other Insurance" provision limited total recovery to the highest applicable limit for any one vehicle, and because Johnson had already received $1,000,000 from the primary insurer (Travelers)—the highest applicable limit—she was not entitled to additional UIM benefits from Safeco as an excess insurer. The court distinguished this anti-stacking provision from an impermissible set-off, found no ambiguity, and concluded the coverage was not illusory because Safeco would pay if primary coverage were lower.

Holdings

1. The Safeco policy does not create a set-off; it involves stacking of separate policies. The policy's 'Other Insurance' provision limits total recovery to the highest applicable limit, and does not reduce Safeco's obligation by the amount paid by another insurer.
2. Safeco's policy unambiguously precludes stacking. The 'Other Insurance' provision, read as a whole, limits total UIM recovery to the highest applicable limit for any one vehicle.
3. Safeco's coverage is not illusory because the policy never promises the maximum coverage limit in the first place, and the 'Other Insurance' provision does not take away coverage that was promised. The coverage would apply if the primary coverage was less than the highest applicable limit.

Questions Presented

1. Whether the Safeco policy involves an impermissible set-off of coverage or instead a stacking of separate policies.
2. Whether Safeco's policy unambiguously precludes stacking of UIM coverage from multiple policies.

Disposition

affirmed