However, as a recent Indiana Supreme Court case shows, there may be some exceptions, particularly with underinsured motorist (UIM) coverage benefits that require insureds to exhaust the underinsured motorist’s coverage first.
The case, State Farm Mut. Auto. Ins. Co. v. Jakubowicz, began with a 2007 car accident that resulted in injury to a mother and her two sons.
According to court records, plaintiff and her two sons were in a crash with defendant underinsured motorist. The injuries sustained in the crash were substantial. A year after the collision, plaintiff filed a lawsuit on behalf of her and her sons seeking damages against the at-fault driver for medical and property damage.
In December 2009, shortly before the three-year statute of limitations would expire, plaintiff filed notice that she would likely pursue underinsured motorist (UIM) benefits from her own insurer. These benefits, purchased by the plaintiff, would kick in if the insurance coverage of the at-fault driver was not sufficient to cover all injuries.
It wasn’t until after the three-year statute of limitations had expired, however, that actually filed her claim for UIM benefits. the trial court granted her motion for leave to amend in July 2011.
The insurance company moved for a summary judgement on the UIM claim, arguing that because it was filed after that state’s three-year statute of limitations on injury lawsuits, it was time-barred. The motion was denied.
The Indiana Court of Appeals reversed this ruling, finding the policy was not ambiguous and the three-year statute of limitations for filing a UIM claim was clear and plaintiff failed to comply.
Plaintiff then appealed to the state supreme court.
The court first looked carefully at the policy itself. Any ambiguity is to be decided in favor of the insured, as it is the insurer that actually writes the policy.
The insurance policy did clearly state that any claim for UIM benefits may only be brought within three years immediately following the date of the accident. However, plaintiff argued the policy language is ambiguous because it also states elsewhere that this legal action can’t be taken until there is “full compliance with all provisions of the policy.” One of those provisions states that the insurer will only pay the full amount of all available bodily injury liability limits that apply if the insured has exhausted the benefits available by the underinsured motorist’s insurance policy.
But here, plaintiff pointed out, the case against the at-fault driver was still pending.
The Indiana Trial Lawyers Association filed an Amicus brief in the case, noting the policy essentially required the insured to simultaneously to file a lawsuit and not file a lawsuit.
The court found the policy here was substantially similar (with some minor differences) to the one in the 2013 case of Wert v. Meridian Sec. Ins. Company. In both cases, the insurer required full compliance with all policy provisions and exhaustion of at-fault driver’s auto insurance liability limits.
Because this resulted in an ambiguous meaning, that meant the court had to decide the case in favor of plaintiff. The appellate court’s decision was reversed and the original ruling of the trial court reinstated.
Contact the Carolina injury lawyers at the Lee Law Offices by calling 800-887-1965.
State Farm Mut. Auto. Ins. Co. v. Jakubowicz, July 26, 2016, Greensboro Car Accident Lawyer Blog
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