The Tennessee Supreme Court has determined that a fund established to allow governmental entities to pool financial resources for purposes of providing liability coverage is not insurance and is not subject to uninsured motorist laws.
The decision comes in a case that involved an Anderson County Sheriff’s patrolman who was struck by a pickup truck while directing traffic at an accident scene. The patrolman, Dennis Michael Harris, was awarded damages of $1,250,000 from both the driver and owner of the pickup truck, but neither was insured. Mr. Harris then made a claim against the Tennessee Risk Management Trust (TRMT), which provides motor vehicle liability coverage to Anderson County, as well as other counties and cities in Tennessee.
The trial court ruled in favor of Anderson County, as did the Court of Appeals, finding that because the governing statute deems TRMT to be a “risk pool” and not an insurance company, the uninsured motorist requirements do not apply. Tennessee’s uninsured motorist law requires that anyone who purchases insurance also buy coverage (unless waived in writing) to protect themselves in case there is an accident with someone who has no coverage.
The Supreme Court agreed to hear the case on appeal and examined the “natural and ordinary meaning of the language” of the law providing for agreements such as TRMT. The Court, in an opinion written by Justice Cornelia A. Clark, determined that the law is “straightforward and means that the governmental funds pooled and entities created pursuant to this statute are not insurance companies and are not subject to statutes regulating insurance companies and policies.”
Read the Dennis Michael Harris v. Mickey Deanne Haynes opinion, authored by Justice Clark.