Bacon v. Universal Insurance Company – Disputing UIM Benefit Denial

Uninsured and underinsured motorist coverage in North Carolina is designed to protect people injured on the road from financially irresponsible motorists.carwithkeys

In other words, if another driver causes a serious car accident in which you are injured but that driver doesn’t have insurance or only carries the bare minimum insurance, one of the only ways you might be able to recover damages is through UM/ UIM coverage, which you purchase separately.

But collecting on those benefits can sometimes mean you’re in for a fight with the insurance company.

That’s when you want to have an experienced car accident lawyer on your side.

In the recent North Carolina Court of Appeals case of Bacon v. Universal Ins. Co., an auto insurance company had succeeded in obtaining summary judgment at the trial court level after denying UIM coverage to an insured. The appeals court affirmed.

According to court records, insured was issued a commercial auto insurance policy in 2010. That policy expressly provided for liability, medical and UM/ UIM coverage. The policy allowed for $1 million in liability coverage and $50,000 per person or up to $100,000 per accident in UM/ UIM benefits.

The following year, plaintiff was on his motorcycle (not a vehicle expressly covered under the policy) when he was struck by another driver. He sustained serious injuries. It was determined the other driver was at fault and her insurance company soon after tendered a payment of $50,000, which was the full amount of liability coverage provided by her auto insurance policy.

Soon after, plaintiff filed a claim for UIM coverage to his own insurance company, claiming the vehicle driven by the at-fault driver was an underinsured motor vehicle. The insurer denied the claim.

Plaintiff responded by filing a lawsuit against the insurer, in which he sought $1 million in UIM coverage and asserting the company had breached its contract and engaged in unfair trade practices. (Such claims, if successful, can result in triple damages.)

Defendant responded by denying the material allegations and asserting a counterclaim for a declaratory judgment indicating it wasn’t obligated to provide UIM coverage to plaintiff because the $50,000 he received from the at-fault driver’s insurer was not less than what he would have received from UIM coverage.

Trial court granted defendant’s motion and dismissed plaintiff’s complaint with prejudice (meaning he couldn’t file it again). But he could appeal, which is what he did.

First, plaintiff contended he was entitled to $1 million in coverage because the statutory provisions pertaining to UM/ UIM coverage are ambiguous and contradictory, so they should be construed in favor of the highest coverage. Not so, the court. And just because plaintiff had a $1 million limit for bodily injury liability coverage doesn’t mean he was entitled to that much in UM/ UIM coverage.

So then the next question was whether the at-fault driver was by definition an underinsured motorist. Her policy allowed for a maximum $50,000 and that is what plaintiff received from her insurer. His UIM coverage provided for $50,000 in benefits, so by definition, she was not “underinsured.”

Therefore, plaintiff was not entitled to collect anything from his insurer.

Contact the Carolina injury lawyers at the Lee Law Offices by calling 800-887-1965.

Additional Resources:

Bacon v. Universal Ins. Co., Jan. 5, 2015, North Carolina Court of Appeals

More Blog Entries:

Birch v. Polaris Industries, Inc. – Product Liability for Crash Injuries, Jan. 2, 2015, Asheville Car Accident Lawyer Blog

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