Our own Gary Burger was invited to speak about how to Maximize Your Client's Uninsured and Underinsured Claims During a Pandemic and Bad Faith Claims in the August 19-21, 2020 session of Continuing Legal Education at the Missouri Solo and Small Firm Conference. He has shared the information from that presentation below.
Uninsured Motorist Coverage
All auto insurance policies carry a minimum uninsured motorist coverage in Missouri in the amount of $25,000.
If you, a family member or friend are injured in an automobile accident and the driver who was at fault did not have insurance, and is uninsured, your insurance pays. This includes compensation for medical expenses, wage loss, pain and suffering and emotional distress.
Every policy holder has this coverage and it is the same as if the other driver actually did have insurance - but your insurance policy provides coverage for the other driver’s negligence.
Uninsured coverage applies:
- If there is a hit and run or phantom driver
- If you’re walking and you are struck as a pedestrian by another driver who leaves
- Circumstance where you do not know or cannot track down the identity of the phantom driver
- Defendant could have failed to pay their premium and their insurance was canceled even though they had an insurance card at the scene
The answer to a question I often am asked is make an uninsured claim even if you are worried your premiums may go up.
Some tips in making these claims:
- Always get a certified copy of the policy.
- Read the Definitions section first.
- “Follow the path” of insurance language in the policy to get to coverage for the insured in the vehicle.
- Don’t wait for the 3P case to settle to open the UIM claim.
- Be careful of multiple claimants and multiple defendants.
Underinsured coverage is not mandatory in Missouri. It provides coverage if the first party (tortfeasor) defendant has less insurance than the damages suffered by the plaintiff.
To make an underinsured claim, first settle the claim with the tortfeasor and exhaust their coverage.
The claimant has to get all money available from the negligent driver. If the negligent driver has $25,000 in insurance, and settle that claim for $20,000 - the underinsured claim is gone.
Put underinsured carrier on notice, and let them know of the claim, let them know when the case against the tortfeasor driver settles, and make sure they do not object. Then, the claim is ripe against the underinsured carrier.
The notice should be done in writing and will assign a claim number.
It's kind of crazy, but sometimes, insurance companies will not admit to underinsured coverage or tell a client how to make that claim.
They will have separate claims adjusters and separate departments for underinsured coverage.
The adjuster for a property damage or medical payment coverage will not tell a claimant they have a possible uninsured claim or a possible underinsured claim.
Adjusters can call asking if you are really trying to settle a property damage claim, or get medical payment coverage or what exactly I was writing about. They try to trick and create obstacles - even a lawyer like me.
So, always make underinsured claim clearly, in writing, and ensure an underinsured claims adjustor is assigned -separate from any property or med pay adjustor.
Remember you cannot stack underinsured coverage.
Also, remember there is usually a set-off amount recovered from underlying insurance - which raises issues that can make it difficult to determine the exact amount of coverage - see below.
Stacking Uninsured Motorist Policies
In Missouri the claimant can stack the minimum $25,000 uninsured from every vehicle owned under that same policy in that household.
This is because uninsured coverage is mandatory and the State of Missouri, both through statutes and court decisions, require that coverage.
For example, if you are injured and your vehicle has $25,000 of uninsured coverage, but also two other vehicle that are insured on that policy, you will have $75,000 in uninsured coverage.
Insurance companies will never tell you this and very often try to settle uninsured claims directly with their claimants without so advising them.
Stacking is defined as an insured’s ability to obtain benefits either from more than one insurance policy, as when the insured has two or more separate vehicles under separate policies, or from multiple coverages within a single policy, as when an insured has one policy that covers more than one vehicle. Martin v. Auto Owners Insurance Company, 486 S.W.3d 390, 393 (Mo. App. W.D. 2016).
In Floyd-Tunnell v. Shelter Mut. Ins. Co., 439 S.W.3D 215 (Mo.banc 2014),Plaintiff's husband was killed in an accident involving an uninsured motorist. Each of three auto policies in household provided $100,000 UM coverage, but contained an"owned vehicle" exclusion which limited coverage to the mandatory minimum if the insured was injured while occupying a vehicle.
Defendant paid $100,000 on the vehicle involved in the accident, but only $25,000 under each of the other 2 policies based on the "owned vehicle" exclusion.The Supreme Court held that the term "insured" referred to the decedent, and not to the wife (who was not in the vehicle at the time of the accident).
The court believed the policy had to be viewed with the decedent as the "insured". The court held that the declarations page had to be read in conjunction with the policy language indicating that the declarations were subject to the conditions and exclusions contained in the policy.
Missouri law mandates that all policies of automobile insurance in this state must include uninsured motorist coverage. Section 379.203 RSMo.
Missouri public policy flowing from this statute requires that multiple uninsured motorist coverages must be allowed to be stacked, and prevents insurers from including policy language denying stacking.
Here's a video on what to do if hit by an uninsured driver.
Underinsured Motorist Offsets
Missouri Supreme Court has ruled underinsured motorist policies can setoff amounts based on prior payments if the policy language allows such an offset – Owners Ins. Co. v. Craig, 514 S.W.3d 614 (Mo. banc 2017)
In Owners, the policyholder had an underinsured motorist policy with a $250,000 limit. She had already received a $50,000 policy-limit settlement from the at-fault motorist.
The parties stipulated that her damages exceeded $300,000, but the Supreme Court ruled Owners could offset the $50,000 received against the $250,000 policy limit, so it owed the policyholder $200,000, rather than the $250,000 underinsured motorist policy limit
But remember Missouri Underinsured Motorist Statute – Mo. Rev. Stat. § 379.204:
“Any underinsured motor vehicle coverage with limits of liability less than two times the limits for bodily injury or death pursuant to section 303.020 shall be construed to provide coverage in excess of the liability coverage of any underinsured motor vehicle involved in the accident.”
The intent of Section 379.204 is to prevent insurance companies from offsetting entire amount of purported underinsured motorist coverage of $25,000.
Under Section 379.204, any underinsured policies less than $50,000 (for example, a $25,000 UIM policy) will become excess over a $25,000 liability policy – therefore the injured party and underinsured policyholder will be able to recover $25,000 from the tortfeasor and then $25,000 in excess from their underinsured motorist policy, assuming their damages exceed $50,000
And note that an insurance company can never promise on the declaration page to provide the consumer with a certain amount of underinsured motorist coverage and then take it away in the fine print of the multi-page insurance policy.