Underinsured motorist coverage is intended to cover damages when the at-fault driver’s own insurance policy limit isn’t enough to cover all the costs incurred by plaintiff as a result of a crash. Uninsured motorist coverage, meanwhile, is intended to help in situations where at-fault driver has no real insurance coverage.
Insurers market it as a cushion that consumers can lean on, with feel-good slogans that compare the company to a “good neighbor” and assuring you that you’re “in good hands.”
It’s true that uninsured motorist coverage (UM) and underinsured motorist coverage (UIM) is good to have. That doesn’t mean if you need it that it will be easy to get. In fact, insurance companies use every tactic at their fingertips to limit liability. This is true even when causation seems clear and customers who faithfully pay their rates make reasonable offers of settlement. That’s why so many insurance companies are pursued for claims of “bad faith” – for failing to treat fairly those to whom they are liable.
Battles against insurance companies over UIM coverage play out every day across the country. One of those recent cases was before the Georgia Supreme Court. In Travelers Home & Marine Ins. co. v. Castellanos, the court was asked to weigh the burden of proof between insured plaintiff and the UM carrier, where the carrier denied coverage based on the assertion the at-fault driver in the case was not “uninsured” as defined in the policy.
The incident that set off this case was a 2009 traffic accident. We don’t know the details of that crashed based on the state supreme court records, except that plaintiff obtained a judgment against the at-fault driver for both compensatory and punitive damages.
During these proceedings, defendant driver was defended by his insurance company, and was personally absent from the trial.
Jurors awarded both compensatory and punitive damages in the case. Post-trial, defendant insurer sought a settlement with plaintiff that was less than the judgment, claiming punitive damages weren’t covered in the at-fault driver’s policy.
When plaintiff rejected this offer, the insurer denied coverage to its insured/defendant on grounds he failed to cooperate in defending the lawsuit, as required under the policy.
At that point, plaintiff sought coverage from his own carrier via uninsured motorist coverage.
The carrier refused to pay out the claim, asserting the at-fault driver wasn’t “uninsured.” Plaintiff sent written demands for payment, but insurer never responded. Plaintiff then, in addition to his pending lawsuit for UM benefits, also sued for bad faith refusal to pay under the existing policy.
Plaintiff’s insurance company insisted the at-fault driver’s insurance company illegally denied coverage under at-fault driver’s policy, and thus, he was not an uninsured motorist and therefore, the crash was not covered under plaintiff’s UM policy.
Trial court sided with insurer, finding plaintiff didn’t present evidence showing there was a legal denial of coverage by at-fault driver’s insurer. In a split opinion, the appellate court reversed, finding the proof burden was wrongly shifted to the plaintiff. However, the state supreme court sided with the dissenting judges, determining the proof burden should have been on the plaintiff, who failed to prove the other insurance company had lawfully denied the claim.
In this case, two insurance companies are playing tug-of-war with a plaintiff who simply wants to collect reasonable damages for compensable injuries.
This case shows why even with adequate insurance coverage, it’s imperative to consult with an experienced personal injury lawyer following a crash.
If you have been a victim of a traffic accident, call Chalik & Chalik at (954) 476-1000 or 1 (800) 873-9040.
Travelers Home & Marine Ins. co. v. Castellanos, June 1, 2015, Georgia Supreme Court
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