Sleiter v. Am. Family Mut. Ins. Co. – School Bus Accident Insurance Coverage

Plaintiff in Sleiter v. Am. Family Mut. Ins. Co. was one of 19 people injured in a school bus accident.
Another driver was at-fault for the crash. Through the school district, the bus was insured for a maximum $1 million per accident. However, divided among 19 people, this didn’t leave plaintiff much for the type serious injuries he suffered. He therefore sought coverage through his parents’ underinsured motorist coverage policy for the difference between what he’d collected through the school’s insurance policy and what his actual damages were, under the policy limits of his parent’s policy.

However, the insurer denied this claim, asserting the “coverage available” to plaintiff – $1 million – exceeded his parent’s policy and thus he couldn’t collect. District Court agreed, as did the appellate court. However, the Minnesota Supreme Court reversed. The court found the phrase “coverage available” in reference to “excess insurance protection” to be ambiguous, or having more than one reasonable meaning. In such cases, the outcome will be skewed in favor of the injured (as being at a disadvantage for not being the one to write the policy). Further, the court ruled that “coverage available” refers to the benefits actually paid to the insured under other polices, rather than what is actually available.

Now, plaintiff will likely be able to collect the difference between what he received under the school bus insurance policy and the at-fault driver’s liability limit ($60,000) and what his actual damages were.

This case is noteworthy for a number of reason, one of those being the fact that a recent National Highway Traffic Safety Administration report reveals an average of 135 people are killed every year in school bus crashes. Many thousands more are injured.

In this case, school bus was struck by an at-fault vehicle in February 2009. Nineteen people on that bus were hurt.

When those individuals sought recovery of damages for their injuries, district court assigned a Special Master to assess victim damages on each claim. The total amount of damages reached more than $5.3 million – far in excess of the school’s per-accident limit of $1 million.

Damages for this plaintiff’s claims were deemed to be $140,000. Because of the significant gap in total damages and tendered insurance limits, the court ruled the 19 victims should share on a percentage basis in the insurance proceeds. This plaintiff received $1,600 from the at-fault driver’s insurance company and $35,500 from the school bus policy.

This was not nearly enough to cover his damages. In fact, it was about $104,000 short.

His parents had a UM/UIM policy that provided up to $100,000 in coverage. He was a beneficiary to that policy. However, the insurer argued it should not have to pay anything because the total amount of coverage available was in excess of $1 million. Nevermind the fact plaintiff was only entitled to receive a fraction of that.

Plaintiff took insurer to court seeking $65,500 in excess UIM benefits – the difference between what the school and at-fault driver’s insurance company had actually paid and the $100,000 limit on his parent’s UIM policy.

It was undisputed when the case went to the state supreme court that plaintiff recovered less than his total damages from the at-fault vehicle and the school district. The question was whether he was entitled to recover excess UIM benefits from his family’s policy. The court ruled that, yes, he was.

Contact the South Carolina injury lawyers at the Lee Law Offices by calling 800-887-1965.

Additional Resources:
Sleiter v. Am. Family Mut. Ins. Co., Aug. 5, 2015, Minnesota Supreme Court

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