Malone

We hold here that underinsured motorist coverage is not the equivalent of full excess coverage. As the statutory scheme is designed, the underinsured motorist carrier gets a dollar-for-dollar credit for all payments by third party tortfeasors to the insureds, whether the insureds are made whole or not. In other words, a carrier providing underinsured motorist benefits never pays the full amount, only the difference between the policy limits and all contributions by all tortfeasors to all insureds.

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Jo Ann Malone’s husband was struck by a car and killed as he changed a tire on a roadway. Plaintiff was in their truck at the time and witnessed his death. The driver was insured by a Teachers Insurance Company policy with limits of $100,000 per person and $300,000 per accident. Nationwide provided single limit underinsured motorist coverage for the Malone vehicle in the amount of $500,000. Malone’s children assigned their rights as their father’s heirs to her, and she recovered $100,000 from Teachers in wrongful death damages. Her husband’s workers’ compensation carrier paid an additional $17,528.87. Nationwide paid its $500,000 policy limits less the sums received by…