In White v. Continental Ins. Co., 119 Nev. 114, 65 P. 3d 1090 (2003), the Nevada Supreme Court faced a unique situation. The question was whether an Uninsured / Underinsured Motorist (UM/UIM) carrier owed benefits to an insured who had been injured when his automobile was hit by a street-sweeping machine owned by the City of Reno. The doctrine of Sovereign Immunity protected Reno. Nevada’s Waiver of Sovereign Immunity Statute, N.R.S. 41.031 et seq. provides that recovery against any governmental entity is limited to $50,000.00 in damages. The City insured itself for the $50,000.00 potential damages. Thus the Court quickly dispensed with the argument that the street-sweeper was uninsured for purposes of UM coverage.
The court did however reach a very interesting conclusion on the issue of UIM coverage. The Nevada statute regarding UIM protection, N.R.S. 687B.145(2), specifically provides that UIM coverage must be made available to insureds who are "legally entitled to recover" from an adverse driver, when the adverse driver's liability limits are insufficient to extinguish that liability." In this case, the statutory cap limited the amount of recovery to the $50,000.00. What that means is if the plaintiff had taken the City to trial, the most he would have ever been legally entitled to recover was $50,000.00. In light of that unique circumstance, the Supreme Court refused to expand the interpretation of N.R.S. 687B.145(2) to require UIM benefits, even though the tortfeasor could never have been legally obligated to pay them.
If you have questions regarding UM/UIM coverage in Nevada, please bring those questions to Mills & Associates. Allow us to help you find an answer.
