A vehicle insured by Shelter Mutual Insurance Company was permissively being driven by an individual who was insured by American Farmers and Ranchers Mutual Insurance Company . The driver was involved in a collision that occurred when he turned left in front of another vehicle which resulted in injuries to the passengers of the second vehicle. The passengers of the other vehicle made claims for property damage and personal injury against the driver for his negligence and submitted claims to both insurance companies.

American Farmers’ policy contained an "other insurance" clause that stated: "provided, however, the insurance with respect to a . . . non-owned automobile shall be excess insurance over any other valid collectible insurance. . . ."

Shelter’s policy also contained an "other insurance" clause which stated: "if there is other insurance which covers the insured’s liability with respect to a claim also covered by this policy, coverages a and b (i.e., bodily injury and property damage liability) of this policy will apply only as excess to other insurance."

The two insurance companies jointly settled the claims and prorated the amount of the settlement based on the liability limits in the respective insurance policies. The Shelter insurance policy contained an "other insurance" exclusion which limited insurance coverage only to claims only in excess of other insurance which covered an insured’s liability. American Farmers reserved the right to recover from Shelter in the event Shelter’s "other insurance" clause was deemed invalid.

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Ultimately, American Farmers’ filed suit arguing that Shelter’s insurance policy declaring the auto liability insurance as excess insurance violated 47 O.S. §§ 7-600 to 7-612, the Oklahoma Compulsory Insurance Law ("OCIL"), which required the insurance policy of the vehicle owner to provide primary insurance up to the minimum limits required by law. American Farmers believed its policy was not required to pay the claims until Shelter had paid policy limits on the claims since the vehicle in the Shelter policy was involved in the accident.

Shelter contended that the "other insurance" clauses cancelled each other and were mutually repugnant and should be, therefore disregarded, with the loss shared on a prorated basis. The trial court agreed and entered judgment in favor of Shelter resulting in the appeal by American Farmers.

Upon appeal, the Oklahoma Court of Civil Appeals affirmed the trial court’s ruling and held:

. . . the OCIL does not constrain an insurer from declaring its coverage as excess when there is other insurance which covers its insured’s liability with respect to a claim also covered by its policy. The statutory policy of the OCIL is implicated only if the insurer denies liability. It does not control a dispute between insurers as to which provides primary coverage. Such a dispute is a matter of contract. The trial court properly resolved the dispute when it determined the policies contained mutually repugnant other- insurance clauses and prorated their coverages.

American Farmers & Ranchers Mut. Ins. Co. v. Shelter Mut. Ins. Co., 267 P.3d 147, 2011 OK CIV APP 118.