State Farm Mutual Automobile Insurance v. Sims

Jack Holt, Jr., Chief Justice.

An issue of first impression in Arkansas is presented by this case. The court is being asked to decide whether an automobile insurance carrier may, by policy language, set-off its medical payments, made on behalf of its insured to a third party, against its payment for the same insured to the injured party of the policy limit for bodily injury. The trial court held that the provision allowing such a set-off was void as against public policy since the set-off would effectively reduce the stated policy limits. It is from that decision that the insurance company…