No. 32787 Walter Gauze v. Chidetta Reed and National Union Fire Insurance
Benjamin, Justice, concurring:
Despite policy language that it provides primary insurance for any covered
'auto' you own, (See footnote 1) National Union contends that its policy's other insurance provisions
operate to avoid requiring it to respond to Mr. Gauze's claim and to defend Ms. Reed.
According to National Union, its policy does not provide coverage for the covered claim
herein because the existence of the Oak Casualty policy, regardless of the solvency of Oak
Casualty, converted the National Union policy from a primary policy to an excess
policy. (See footnote 2) Were the National Union policy indeed an excess policy, its argument would have
merit. However, the plain terms of National Union's policy language declare that it provides
primary coverage arising from operation of the vehicle involved in the Gauze accident.
Thus, this Court is presented with the unusual situation wherein two primary liability insurance policies were purchased to cover the same vehicle. In West Virginia, primary insurance coverage follows the vehicle, not the driver. Allstate Insurance Company v. State Automobile Mutual Insurance Company, 178 W. Va. 702, 707, 364 S.E.2d 30, 33 (1987) (where two policies of insurance provide liability coverage for an automobile accident and contain competing other insurance provisions, the policy insuring the vehicle is to provide primary coverage and the policy insuring the driver becomes excess). The National Union policy at issue herein provided primary liability coverage for the accident at issue both under its own terms and under West Virginia law. Had Oak Casualty remained solvent, an examination of competing other insurance provisions contained in both the Oak Casualty policy and the National Union policy would have been necessary to determine how liability should be apportioned between the two. However, Oak Casualty's insolvency eliminates the need for this task. Since no other solvent, primary policy exists, National Union's policy is the sole primary policy available to respond to the Guaze claim. The Guaranty Association is statutorily prohibited from paying claims unless all other available insurance covering the claim is exhausted. Because National Union's policy is a primarily liability policy, its insurance policy is required to be exhausted before the Guaranty Association's obligation is triggered. If the value of Mr. Gauze's claim exceeds the National Union policy limits, the Guaranty Association would then be required to provide coverage up to statutory limits and subject to statutory offset requirements. See W. Va. Code § 33-26-12.