It’s all relative
James North is the father of Miles North. In February 2018, James purchased a personal umbrella policy from Selective Insurance Company of South Carolina. The policy defined the term “insured” to include relatives of James who resided in his household. At the time the policy was issued and at all relevant times in this case, Miles, his wife Shannon, and their two children resided in the same household.
In April 2018, Shannon and her two children were involved in an automobile accident that caused Shannon serious and permanent injuries. The other driver’s automobile liability insurance paid its full limits of $50,000 to Shannon and the children, and Shannon and Miles’s automobile liability insurance paid its uninsured motorist/underinsured motorist (UM/UIM) limits of $300,000.
The following November, the Norths filed a complaint for damages against several defendants, all of whom were dismissed except Selective. The Norths sought to obtain UIM coverage for Shannon’s accident from Selective under James’s umbrella policy. In August 2019, the Norths moved for partial summary judgment; Selective filed a response and a cross motion for summary judgment. The court denied the Norths’ motion and entered summary judgment for Selective. The Norths appealed.
On appeal, the court noted that under Indiana law, insurers that issue automobile liability policies must provide UM/UIM coverage in specific amounts unless the insured affirmatively rejects it in writing. On the other hand, an insurer that issues a personal umbrella policy is not required to include UM/UIM coverage. Although not required to, an insurer may offer UM/UIM coverage as part of a personal umbrella policy, and, if so offered, an insured may purchase it, if desired.
The Norths contended that the right of an insured to reject UM/UIM coverage and the requirements of that rejection as set forth in a state statute apply not only to automobile liability policies but also to personal umbrella policies. Based on that contention, they asserted that the statutory requirements for rejection were not met in this case, and thus James should be afforded UM/UIM coverage under his personal umbrella policy in effect at the time of Shannon’s accident.
The court pointed out that the Norths’ argument ignored a subsection of the statute that concerns personal umbrella policies. The subsection states that, under a personal umbrella policy, insurers may, but are not required to, make available UM/UIM coverage. Thus, with regard to a personal umbrella policy, inclusion of UM/UIM coverage is dependent on (1) whether UM/UIM coverage was available from the insurer and (2) whether the insured requested, and perhaps more important purchased, the coverage as part of the policy.
The parties agreed that UM/UIM coverage was available from Selective in its personal umbrella policies. The issue lay with whether James requested and purchased it.
The court stated that the quote provided to James did not include a premium for UM/UIM coverage and that nowhere in the application was it indicated that James requested the coverage. In fact, the court said, the notation in James’s application stated that UM/UIM coverage was “rejected.”
The judgment of the trial court was affirmed.
North v. Selective Insurance Company of South Carolina—Court of Appeals of Indiana—September 16, 2020—No. 20A-PL-639.
