The Tennessee Court of Appeals in Nashville has upheld a choice of law provision that was included in an auto insurance policy. In Williams v. Smith, a couple and their young child were injured in a Putnam County, Tennessee car wreck that was caused by another driver. The accident was a head-on collision. At the time of the accident, the couple was headed east in a vehicle they borrowed from a North Carolina couple. Although the vehicle was registered in North Carolina, the owners of the vehicle secured liability insurance in Missouri in order to cover their college-age daughter while she was away at school. The accident policy included a Missouri choice of law provision and included uninsured motorist coverage of $50,000 per person and $100,000 per accident. The policy did not include underinsured motorist coverage because it is not required under Missouri law.
The driver who caused the Tennessee car wreck carried the minimum liability limits of $25,000 per person and $50,000 per incident as required by Tennessee law. Following the crash, the hurt family sought additional damages from the company that insured the vehicle they borrowed in a Tennessee court. Although the accident occurred in Tennessee, the issue in the case surrounded whether North Carolina or Missouri law applied to the insurance dispute. Since North Carolina requires a driver to carry liability coverage of $30,000 per person and $60,000 per accident, the at-fault motorist would be considered an uninsured motorist under North Carolina law. If, however, Missouri law controlled, the man was simply an underinsured motorist, and the family was not entitled to collect additional benefits.