Disputes involving primary/excess liability limits fall within the jurisdiction of the Auto Forum. These occur when the filing company seeks recovery of its first-party damages from multiple Responding companies that provide the property damage liability coverage or a state-specific minimum financial liability limit for the same insured. In these cases, the Responding member companies will argue their coverage situation regarding primary/excess and provide evidence to support their position. 

There are filings that will require the Responding member companies to provide their property damage liability policy limit amount or a state-specific minimum financial liability amount as evidence for pro rata consideration. When a decision is rendered in which both parties are found to be primary based on mutually repugnant or contractual language, liability limits would need to be supported. Evidence supporting each party’s limits is required to properly calculate a pro-rata award. If a party to the filing does not provide or prove its limit amount, an award of the filing company’s total proven damages will be assigned to that member company. This would be unfortunate if a pro-rata apportionment could have otherwise been appropriate.

Below is an example of when Alpha files for recovery of first-party damages arising out of an accident in which the Beta’s and Gamma’s mutual insured is found to be liable:

• Beta argues Gamma is the primary liability carrier or at least that the companies would share the damages pro rata. Beta provided its property damage liability policy limit amount for pro rata consideration.
• Gamma asserts that it has only excess coverage for the loss as the owner of the vehicle. Gamma did not present evidence of its limit amount in the filing. 
• The decision shows the policies/contractual language have mutually repugnant “other insurance” clauses, so pro-rata apportionment of the damages would apply.  
• A pro-rata award is unable to be determined due to Gamma not providing its limit amount. The total award would be against Gamma for all of Alpha’s proven damages since Gamma did not provide sufficient evidence to support the pro-rata sharing percentages.

There are other scenarios and examples that apply to multiple Responding companies with mutual parties and corresponding coverage. Please reach out to AF with any questions regarding primary/excess filings in the Auto Forum.