Many people carry uninsured/underinsured (UM/UIM) motorist coverage, thinking that it will be a source of easy recovery for them if the worst happens and they are hit by a driver with no insurance or only minimum coverage. While having UM/UIM coverage is definitely a positive factor in an auto accident case, the fact is that payouts under such policies are neither automatic nor easy, especially with regard to policies with relatively high limits.
Texas law requires parties seeking to recover UM or UIM benefits to plead and prove entitlement to such coverage if the parties are unable to reach an agreement outside court. Furthermore, the UIM carrier has no contractual duty to pay any benefits at all until the insured person obtains a judgment establishing both the liability of the other driver and his or her status as uninsured or underinsured.
Facts of the Case
In the recent case of Liberty Mutual Insurance Company v. Sims, the plaintiff was a man who was injured in an automobile accident while operating a commercial vehicle owned by his employer. The man had a personal automobile liability policy that covered underinsured/uninsured benefits, and he was also a covered person under his employer’s UIM policy.
After the accident, the man filed suit against the other driver, whose negligence allegedly caused the crash. He named both his own and his employer’s UIM carriers in the suit as well. He settled the case with the negligent driver for the limits of her liability insurance policy and proceeded to trial against his employer’s UIM carrier.
At trial, there was a dispute as to whether the limit of the employer’s UIM coverage was $1,000,000 (as the carrier admitted in its initial responses to the man’s discovery requests) or $250,000 (as the carrier claimed in a supplemental discovery response). The jury found that the man’s damages were in excess of $2,540,000 and that the applicable policy limit of the UIM policy was $1,000,000.
The Opinion of the Court of Appeals
On appeal by the UIM insurance carrier, the court reversed and remanded. The carrier raised two issues on appeal: whether the trial court should have found its limit to be $250,000 as a matter of law and whether the amount of the limit was relevant to any factual issue to be decided by the jury.
Although the main policy stated that the UIM limit was $1,000,000, the court found that there was an amendatory endorsement that, in plain and unambiguous language, established the UIM limit at $250,000 as of the policy’s inception date. The court further found that the endorsement’s statement was controlling over the main policy and that this was unambiguous as a matter of law.
The court also noted that the insurance carrier’s responses to discovery did not create a factual issue that warranted submission of the UIM limit issue to the jury, nor were its responses to be construed as a judicial admission as to the policy limits.
Perhaps the most tragic factor in this case was the fact that the stated reason for the amendatory endorsement that effectively reduced the available UIM coverage was a “premium adjustment.” In other words, someone tried to save a few bucks for the company by reducing the amount of coverage from $1,000,000 to $250,000. We’re pretty sure the cost savings was nowhere near the $750,000 that the injured man lost as a result.
To Talk About Your Car Accident or UM Coverage Case with a Lawyer
If you have been hurt in a wreck and may have to bring a claim for UM coverage, you need to hire an attorney who will help you fight hard for all to which you may be entitled. To set up a free appointment with an experienced Texas car accident attorney, call the Law Offices of Earl Drott at (903) 531-9300. We help clients in Tyler and throughout East Texas seek maximum compensation for their injuries.
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