Swartzbaugh v. Encompass Ins. & North Carolina Auto Insurance Coverage

Car accidents are very scary. But, what is even scarier is dealing with the insurance companies in the aftermath of a car accident.

If you have been involved in a car accident in North Carolina, you need an experienced North Carolina injury attorney advocating for your rights.
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Insurance companies make the purchasing of car insurance a confusing and complicated process. There are so many types of insurance and policy limits you can purchase. As with most things, the higher your insurance premium, the more coverage. But what happens when you cannot afford more insurance?

Swartzbaugh v. Encompass Insurance Company of America addresses the questions involved within the insurance process. Every state has different laws surrounding car insurance limits and requirements, but many states have adopted the requirement that drivers purchase insurance coverage before they can drive their car. The reason for this mandatory insurance coverage is to safeguard property and medical coverage for those who are involved in car accidents.

There are different types of car insurance offered by insurance companies. These types include: liability insurance coverage; personal injury coverage; coverage for property damage; under-insured motorist (UM) coverage; and personal injury protection (PIP) coverage. States impose laws that specify the minimum policy limits required for each area of insurance. Drivers are then given the option of whether they want to pay more money monthly in order to purchase additional coverage or higher policy limits.

Swartzbaugh is a case involving the language of a car insurance policy. Mrs. Swartzbaugh was the person in her family responsible for purchasing and paying for car insurance. She and her husband (plaintiffs) purchased their car insurance from a local insurance broker. This coverage was provided by Encompass Insurance Company of America (defendant) and covered three vehicles for the plaintiffs and their daughter Kelly. Upon purchasing this policy, plaintiffs decided not to purchase the additional policy limits available with defendant. A waiver required the signature of the “first named insured.” Mrs. Swartzbaugh signed this document and left her family with minimum insurance in case of an emergency.

Subsequently, Kelly was the passenger in a vehicle that was involved in a car accident caused by an under-insured driver. Kelly was injured and needed compensation to pay for medical expenses. The under-insured driver’s insurance company gave Kelly the policy limits available on the under-insured driver’s policy. However, when Kelly attempted to collect benefits from her insurance company, she was denied because of the waiver the plaintiffs had signed.

Defendant argued that Mrs. Swartzbaugh was the “first named insured” and because of this she had the authority to sign this waiver binding both parties. Through this signature, the additional rights of all of the three insured’s were limited.

Plaintiffs argued that the “first named insured” should be extended to the name of the person involved in the incident and therefore, the imputation of this term on Mrs. Swartzbaugh was incorrect.

The court in this case found that for insurance purposes, the term “first named insured” refers to the person listed on the policy that purchases and manages the relationship between the insured’s and the insurance company. It would be unfair to apply this term to the first person listed on the policy because this could change and that would be arbitrary.

Because the mother was the “first named insured” she had the authority to waive additional benefits and limit Kelly’s right to compensation from her insurance company.

If you have been injured contact North Carolina injury attorneys at Lee Law Offices to schedule a free appointment today. Call 800-887-1965.

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