TH~~A~ORNEYGENERAL
OF’ TEXAS
AXJIWX-IN.T-s 78711
May 7, 1975
The Honorable hi. L. Brockette Opinion No. H- 602
Commiraioner of Education
201 East Eleventh Street Re: Uee of school dicrtrict
Austin, Texar 78701 fund6 to purchase personal
injury insurance protection.
Dear Dr. Brockette:
Noting that school dirtrictr are authorized to purchase insurance
protection againat claim8 made by injured partier and othera under the
Texas Tort Claims Act (Article 6252-19, V. T. C. S.), your office has
asked whether an independent rchool dirtrict may we local district
maintenance funds to purchase:
(a) Personal injury protection coverage as pro-
vided for in article 5.06-3, Vernon’8 Texas Inrur-
anco Code (Acts 1973, 63rd Leg., ch. 52, p. 90);
(b) Uninsured motorist protection as provided for
in article 5.06-1, Vernon’8 Texas Insurance Code,
(Acts 1967; 60th Leg., .ch. 202; p. 448).
In Attorney General Opinion M-989 (1971) this office concluded
that school districts were authorized to purchase insurance protection
against claims for bodily injury arising out of risks recognized by
section 3 of the Texas Tort Claim8 Act (the general liability section)
and that they might also purchase such insurance to cover employees
exposed to individual liability by virtue of their official duties. And
-
see
- Attorney General Opinion H-70 (1973).
Article 5.06-3 requirea that, unlear the coverage ir rejected
in writing, all policier of automobile liability inrurance issued or
delivered in thin State shall provide for personal injury protection
coverage, defined in subparagraph (b) ar:
p. 2670
The Honorable M. L. Brockette page 2 (H-602)
“Personal injury protection” consists of pro-
visions of a motor vehicle liability policy which
provide for payment to the named insured in the
motor vehicle liability policy and members of the
insured’s household, any authorized operator or
passenger of the named insured’s motor vehicle
including a guest occupant, up to an amount of
$2,500 for each such person for payment of all
reasonable expenses arising from the accident
and incurred within three years from the date thereof
for necessary medical, surgical, X-ray and dental
services, including prosthetic devices, and necessary
ambulance, hospital, professional nursing and
funeral services, and in the case of an income
producer, payment of benefits for loss of income
as the result of the accident; and where the person
injured in the accident was not an income or wage
producer at the time of the accident, payments of
benefits must be made in reimbursement of neces-
sary and reasonable expenses incurred for essential
services ordinarily performed by the injured person
for care and maintenance of the family or family
household. . . .
Subparagraph (c) of the article provides that the benefits are payable
without regard to fault and without regard to the availability of similar
benefits from a collateral source. It provides that payment of the benefit
shall not create in the insurer any right of subrogation. These provisions
assure recovery by the beneficiary regardless of duplicate payments in a
judgment against a third person, under workmen6 compensation, under a
hospitalization policy, under a policy covering interruption of employment,
or any other source.
Despite the similarity of this coverage to other coverages which
have been approved for purchase by subdivisions of the State, and
particularly school districts, we are compelled to hold that there is no
authorization for a school district to purchase personal injury protection
p. 2671
The Honorable M. L. BrockeJte page 3 (H-602)
coverage as defined in article 5.06-3(b) of the Insurance Code.
Furnishing hospitalization insurance has been upheld only
because it is considered a part of the employee’s compensation.
Attorney General Opinions Nos. WW-7.31 (1959); WW-1101 (1961). And
-see Byrd V. City of Dallas, 6 S. W. 2d. 738 (Tex. 1938).
However, under section 5.06-3, the coverage bought by the
school district is not only for the employee but also for any other persons
who are injured while riding in vehicles owned by the school district
and operated by its employees. Although limited coverage which
benefited only the employee and those for whom he is financially responsi-
ble might be authorized as a part of an employee’s compensation, s,uch
broad coverage as 5.06-3 contemplates is not, in our opinion, actually
employee compensation since the benefits inure to such a ,broad ,group of
persons.
Further, the school district is not authorized to spend funds to
benefit private individuals. Tex. Const. art. 3, sets. 50, 51 and 52.
Under section 5.06-3, the no-fault character of the coverage would
provide benefits to persons to whom the school district owes no legal
obligation.
In our opinion the provisions of such coverage, at the expense
of the school district, would amount to a grant of public money or thing
of value to an individual, in violation of article 3, sections 50, 51 and 52
of the Texas Constitution.
We, therefore, answer your first question in the negative.
Uninsured motorist coverage is not defined by statute as pre-
cisely as is personal injury protection coverage. See article 5.06-1,
Vernon’s Texas Insurance Code. As described in Lhe Texas Standard
Form automobile liability policy, it is the obligation of the insurer:
To pay all sums which the insured or his legal
representative shall be legally entitled to recover
as damages from the owner or operator of an uninsured
p. 2672
The Honorable M. L. Brockette page 4 (H-602)
automobile because of bodily injury, sickness or
disease. including death resulting therefore, . . .
caused by accident and arising out of the ownership
maintenance or use of such uninsured automobile . , .
In effect, payment under this coverage would meet the obligation
of a third person to the occupant of the district’s vehicle (whether an
employee or not) at the expense of the district. We feel the same
observations we made earlier as to the personal injury protection
coverage would apply and that there is no authority for the purchase
of such uninsured motorist coverage by a school district upon its
vehicles.
Such coverage does not in any way meet any obligation of the
school district created by the Tort Claims Act.
We therefore answer your second question in the negative.
SUMMARY
The purchase of either personal injury protection
coverage or uninsured motorist coverage by an
independent school district with local district
maintenance funds would be unconstitutional.
Attorney General of Texas
LL, First Assistant
C. ROBERT HEATH, Chairman
Opinion Committee
p. 2673