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Which UIM limits apply?

Which UIM limits apply?

Which UIM limits apply?
April 29
12:37 2022

INSURANCE-RELATEDCOURTCASES

Digested from case reports published online

COURT DECISIONS

Which UIM limits apply?

On February 3, 2016, Matthew Bronson, who was intoxicated, was driving in a southbound direction when his vehicle entered the northbound lane and collided with a vehicle owned by Pamela Dana, resulting in serious injuries to Pamela and William Dana, who was a passenger in Pamela’s vehicle. Pamela’s injuries ultimately proved fatal. Jessica Jones, a passenger in Bronson’s vehicle, also was killed in the accident. A vehicle owned and operated by Joshua Ryan Jeffries was damaged in the accident as well.

At the time of the accident, Bronson’s vehicle was covered by an automobile policy issued by Integon National Insurance Company that provided bodily injury liability coverage with limits of $50,000 per person and $100,000 per accident. Subject to approval by the North Carolina superior court, Integon proposed to apportion the full amount of the per accident coverage as follows:

William Dana           $32,000

Estate of Pamela Dana          $43,750

Estate of Jessica Jones          $23,500

Joshua Jeffries         $750

Total            $100,000

At the time of the accident, Pamela Dana held an automobile liability policy with North Carolina Farm Bureau that included underinsured motorist coverage with limits of $100,000 per person and $300,000 per accident. Farm Bureau offered to pay the full per-person limit to both William Dana and Pamela Dana’s estate, less the amount that had been received from Integon’s liability coverage, resulting in the following distribution:

William Dana           $100,000

per person underinsured limit

Integon coverage      -$32,000

Total underinsured payment $68,000

Estate of Pamela Dana          $100,000

per person underinsured limit

Integon coverage      -$43,750

Total underinsured payment $56,250

In response, William Dana argued that he and the estate were entitled to the full amount of per accident underinsured motorist coverage set out in the policy, less the amount of coverage that had been provided by Integon and the amount that had already been offered by Farm Bureau. As a result, Farm Bureau would be obligated to pay a total of $124,250 to the Danas under its own proposal, while it would be obligated to provide a total of $200,000 in underinsured motorist coverage under the proposal they submitted, which consisted of the $300,000 per accident limit provided under the Farm Bureau policy less the $100,000 in coverage provided by Integon. As a result, the Danas claimed to be entitled to an additional $74,750 in underinsured motorist coverage over and above the amount that Farm Bureau had already tendered to them.

On August 7, 2017, Farm Bureau sought a declaratory judgment concerning the amount of underinsured motorist coverage that it was required to provide the Danas. The Danas filed a competing motion, and the trial court granted summary judgment in favor of the Danas. Farm Bureau appealed.

The court of appeals affirmed the trial court’s order and granted Farm Bureau’s petition for discretionary review of the court of appeals’ decision.

According to the supreme court of North Carolina, “the most reasonable reading of the relevant statutory language provides for a common sense resolution of the dispute that is before us in this case, which is that, in cases involving multiple claimants, the total amount of uninsured motorist coverage available to those claimants (considering both the available liability coverage and the available underinsured motorist coverage) is limited by the per accident limit, and the total amount of coverage available to any individual claimant is constrained by the per person limit.”

The court concluded that the case would be appropriately resolved in such a manner as to make the total amount of underinsured coverage payments received by the claimants subject to the per accident limit of liability while limiting the amount received by any individual claimant by the per person liability limit.

The court reversed the court of appeals’ decision and remanded the case to the county superior court for entry of a judgment declaring that the total amount of underinsured motorist coverage made available to the Danas collectively was to be set at the per accident limit, with no individual claimant to receive more than the per person limit.

North Carolina Farm Bureau Mutual Insurance Company, Inc., v. Dana—Supreme Court of North Carolina—December 17, 2021—No. 374PA19.

 

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Jim Brooks

Jim Brooks

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