Guarino v. Allstate Prop. & Cas. Ins. Co. – Underinsured Motorist Benefits Dispute

Underinsured motorist coverage is tacked on to many drivers’ automobile insurance policies, but few have a full understanding of what it is or how it works.

Uninsured/underinsured motorist coverage is coverage you purchase in the event you are the victim of another driver’s negligence, and that driver either lacks insurance altogether or doesn’t have enough insurance to cover your damages.
Most UM/UIM coverage covers the difference between the damages you incurred and the insurance available on the at-fault vehicle. States differ on how they ascertain what insurers should pay when the accident limits exceed the UIM policy or when the at-fault driver’s payout exceeds your own UIM coverage, but still doesn’t cover all your damages.

In South Carolina, the law requires UM coverage for bodily injury and property damage, and insurers must offer at least $25,000 in coverage. UIM coverage, meanwhile, is optional, though drivers are free to decline it.

Still, just because you have UM or UIM coverage doesn’t mean insurers will readily hand it over just because the other driver’s insurance didn’t cover the full extent of your damages. It’s likely you may be in for a bit of a battle, so it’s wise to speak with an experienced Spartanburg accident lawyer before filing a claim.

In the recent case of Guarino v. Allstate Prop. & Cas. Ins. Co., the estate of a woman who died in a crash took her case for underinsured motorist coverage all the way to the Connecticut Supreme Court.

Records indicate the decedent was killed in a crash after she preceded through an intersection without stopping at a stop sign posted there and was struck by another vehicle. However, her vision of the stop sign was reportedly obstructed by vehicles belonging to a paving company and an auto repair store. Her estate sued the owners of those vehicles, and settlements were reached.

One company settled for $20,000, while the second settled for $225,000. The settlement agreements did not indicate a stipulation of fault, and in fact, both disclaimed liability by defendants. Decedent possessed a UIM policy with a coverage limit of up to $100,000.

Her estate argued it was entitled to recover UIM benefits under decedent’s policy because the first individual with whom she settled was for less than the amount of the UIM policy amount.

Following the second settlement, decedent’s insurer filed a motion for summary judgment, arguing it should not have to pay because the aggregate settlement amount was in excess of the UIM policy limit.

Trial court agreed, and rendered a judgment in defendant’s favor. Appellate court affirmed. In an appeal before the state supreme court, plaintiff argued the lower courts improperly failed to adhere to prior case law regarding multitortfeasor situations. Plaintiff asserted that while a reduction of UIM damages for the $20,000 settlement would be proper, it wouldn’t be proper to determine to what extent the second settlement might reduce coverage unless/until a trier of fact found that party “responsible” for decedent’s injuries.

The state supreme court disagreed. While it is true in cases where multiple parties are deemed at-fault for a crash, a claimant need only exhaust the policies of one in order to recover UIM benefits. However, this does not trump the insurer’s right under regulation to limit coverage by any additional payments received by claimant for the same injury.

Here, because the total amount of payments made to the estate exceeded the UIM limits, the insurer was entitled to a full set-off of coverage.

Contact the South Carolina car accident lawyers at the Lee Law Offices by calling 800-887-1965.

Additional Resources:
Guarino v. Allstate Prop. & Cas. Ins. Co., Jan. 6, 2015, Connecticut Supreme Court

More Blog Entries:
Lunsford v. Mills – NC Supreme Court Weighs on UM Coverage in Multi-Vehicle Accidents, Jan. 9, 2015, Spartanburg Car Accident Lawyer Blog

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