Our insured has physical damage coverage under his business auto policy (BAP), as well as uninsured motorists (UM) property damage coverage; the physical damage coverage comes with a $10,000 deductible.

The insured was hit by an uninsured motorist and the damage to the covered auto was $14,000. The BAP insurer paid $4,000 under the auto policy's physical damage coverage due to the $10,000 deductible. Our insured claims the $10,000 should be paid under the uninsured motorists coverage since the damage was done by an uninsured motorist and the insured is legally entitled to recover compensatory damages. The UM insurer is denying the claim because the UM endorsement states that “we will not pay for a loss which is paid or payable under physical damage coverage.”

So, our question is: should the UM coverage pay the $10,000 deductible so the insured is made whole for his loss?