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Apples and oranges: Auto and umbrella policies are not “similar”

Apples and oranges: Auto and umbrella policies are not “similar”

September 20
09:47 2017

Apples and oranges: Auto and umbrella policies are not “similar”

Jody Massey suffered severe injuries on June 11, 2012, when a truck being driven by Brett Pruitt collided with a car being driven by Massey. In May 2014, she filed an action against Pruitt seeking monetary damages for her injuries. Massey subsequently settled with Pruitt in exchange for $100,000, the limits of his automobile policy. Massey then amended her complaint to add a claim for a declaratory judgment to establish uninsured motorists coverage and limits under both her automobile and umbrella policies with Allstate. Massey later settled her automobile policy claim with Allstate for the UM coverage limits of $100,000.

After discovery, Allstate moved for summary judgment on Massey’s claim under her umbrella policy, asserting that the policy had ceased to include UM coverage in June 2010. The court granted summary judgment to Allstate. Massey appealed.

On appeal, Massey challenged the court’s determination that her umbrella policy did not include UM coverage at the time of her accident with Pruitt. She contended that the trial court erred when it ruled that (a) Georgia’s automobile policy non-renewal statute did not apply to umbrella policies that include automobile coverage, and (b) as a result, Allstate was not required to comply with the statute’s non-renewal notice requirements when in 2010 it purportedly cancelled the UM coverage previously included in Massey’s umbrella policy.

In June 2009, Allstate issued primary automobile and umbrella policies to Massey. The umbrella policy included both excess liability coverage of $5,000,000 per occurrence and UM coverage of $5,000,000 per accident. A separate premium was assessed for each kind of coverage. In May 2010, Allstate renewed Massey’s umbrella policy for one year, effective June 30, 2010. The 2010 renewal documents again included excess liability coverage of $5,000,000 per occurrence, for which a premium was assessed. The documents indicated, however, that the policy no longer included UM coverage and accordingly did not assess a separate premium for such coverage. A subsequent notice dated June 2, 2010, indicated that Massey’s excess liability limits had been reduced to $1,000,000 per occurrence and again included no UM coverage. The 2011 umbrella policy renewal documents, which covered the period during which the accident occurred, similarly listed Massey’s excess liability limits as $1,000,000 per occurrence and again included no UM coverage.

According to the court, the primary dispute centered on whether Allstate properly cancelled the UM coverage it previously had provided under Massey’s umbrella policy when it allegedly mailed a notice to her in May 2010 indicating that it was not renewing the UM coverage.

Massey maintained that the automobile policy non-renewal statute governed her umbrella policy, whereas Allstate contended that the statute applied only to primary automobile policies and not to umbrella policies.

The court noted that the statute applied to “automobile polic[ies] or motorcycle polic[ies] that insur[e] a natural person as named insured or one or more related individuals resident of the same household and which provide[ ] bodily injury coverage and property damage liability coverage, personal injury protection, physical damage coverage, medical payments coverage, or uninsured motorist protection coverage, or any combination of coverages.

According to the court, “The plain language of this provision indicates that it applied to Massey’s 2009–2010 umbrella policy, which included coverage for various types of injuries and damage arising out of her use of an automobile, including injuries and damage caused by uninsured motorists. Nothing in the plain language of this statute suggests that the General Assembly intended to limit the term ‘automobile polic[ies]’ to primary policies only and to exclude umbrella policies that include automobile coverage, and we see no reason why such a distinction should be read into the statute.”

The court concluded that Massey’s umbrella policy was subject to the non-renewal provisions of the automobile policy non-renewal statute and that the trial court erred when it ruled to the contrary.

Massey also contended that Allstate’s purported cancellation of the UM coverage under her umbrella policy in May 2010 was ineffective for failure to comply with the non-renewal notice requirements set forth in the statute.

Massey denied having received the May 2010 non-renewal notice, and Allstate did not contend that it personally delivered the notice to her. Rather, Allstate asserted that it “complied with all statutory requirements” by mailing the notice to Massey’s address and that it properly established this fact by affidavit. Allstate conceded, however, that it did not produce a receipt or other evidence of mailing “as prescribed or accepted by the United States Postal Service.”

Allstate alternatively argued that it was excused from complying with the statutory notice requirements because Massey retained “similar coverage on the same motor vehicle.” In a related alternate contention, Allstate maintained that, even if Massey’s umbrella policy continued to provide UM coverage after June 2010, that coverage was capped at the $1,000,000 limits of her excess liability coverage.

The court rejected both of Allstate’s arguments, pointing out that the state insurance code distinguishes between automobile and umbrella policies and that Allstate listed the policies separately and assessed a separate premium for each.

The court reversed the trial court’s order granting summary judgment to Allstate and remanded the case for further proceedings.

Massey vs. Allstate Insurance Company-Court of Appeals of Georgia-May 24, 2017- 2017 WL 2265380.

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