Divided Court Holds Insurer Not Liable for UM Coverage

There is, however, some legal confusion in Florida over when UM coverage applies to such situations. A recent decision by a divided appeals court in Lakeland illustrates the complexity of the problem. This case involves a car accident and two separate insurance policies issued by the same carrier. For the sake of convenience, we’ll refer to these as Policy A and Policy B.

The car itself belonged to a married couple who allowed their daughter to use the vehicle. All three were insured under Policy A. On the day of the accident, the daughter allowed a friend to drive. He was insured under Policy B, which was his mother’s policy.

According to court records, “[t]he accident happened when [the driver] attempted a right turn from the left lane and collided with a car waiting at a red light on the intersecting street.” The driver alleged the accident was due to the car having faulty brakes. He subsequently sued the daughter and her parents for negligence in failing to maintain their car. The insurance carrier declined to cover the family’s potential liability under Policy A, because the driver “was an insured under that policy by virtue of having been permitted to drive the car.”

Meanwhile, the daughter counter-sued the driver, claiming his negligent driving caused the accident and injured her. The insurer eventually paid to settle this claim under the terms of Policy B. The driver then sought uninsured motorist benefits under Policy A.

The insurer balked, arguing UM benefits were not available to the driver under Policy B because he was, in fact, driving a vehicle insured under the very same policy. In other words, by driving his friend’s vehicle with her permission, the car came under his insurance policy. There was therefore no “uninsured vehicle” involved in the accident.

A jury subsequently sorted out the question of who was responsible for the accident: It held the daughter and her family 92 percent liable for negligent maintenance and the driver 8 percent responsible for negligent driving. The trial court then ordered the insurance company to pay $150,000 in damages to the driver pursuant to his UM coverage under Policy B. The insurance company appealed.

In a June 3 decision, the Florida Second District Court of Appeals voted 2-1 to reverse the trial court’s decision on the issue of UM coverage. The majority held the plain language of the policy “unambiguously excludes motor vehicles insured under its liability provisions from its scope.” This included the vehicle the driver was driving on the day of the accident. The dissenting judge argued this was “inequitable” given that the driver’s family paid for both bodily injury and UM coverage, and they should not be denied benefits under the latter just because benefits were also paid under the former.

Get Legal Help Following a Florida Car Accident

The dissenting judge noted this was a “case of first impression in Florida,” meaning other appellate courts in the state could reach a different conclusion based on a similar set of facts. The legal complexity of dealing with insurance policies is just one reason you should always work with an experienced Clearwater personal injury lawyer following any type of accident. Contact the Law Office of Paul B. Genet, P.A., at 727-510-8802, if you need to speak with an attorney right away.

Earlier Judgment Binding in Subsequent “Bad Faith” Lawsuit

Even with UM coverage, however, there may be cases where your insurance company plays hardball and refuses to settle a legitimate claim. If that happens, you may have a separate claim for “bad faith” against your insurer. Florida law allows such claims provided the insured person gives the insurer at least 60 days notice.

The Florida Supreme Court recently addressed one aspect of UM coverage and bad faith claims which had been a source of some confusion among lower courts and trial lawyers. Specifically, the Court rejected a procedural tactic used by some insurance companies to drag out litigation to the detriment of accident victims with legitimate claims.

The plaintiff in this case was injured in a car accident in 2007. The other driver was underinsured. The plaintiff had $50,000 in UM coverage from his own insurer. But even after the plaintiff gave the required 60-day notice, his insurer refused to settle for the full $50,000, instead offering just $5,000. The plaintiff noted that amount would not have even covered his past medical bills.

In 2009, the plaintiff named the insurer as a defendant in a lawsuit against the uninsured driver. The purpose of this lawsuit was to establish the full extent of the uninsured driver’s liability. The plaintiff also gave the insurer another opportunity to settle for the $50,000 policy limit, but once again he received no response.

It was not until early 2011—four years after the accident and a month before trial—that the insurer finally offered to pay the $50,000. The plaintiff said no, but the insurer’s tactic successfully delayed the trial for another six months. The plaintiff rejected a second $50,000 settlement offer, in part because a jury verdict could establish the insurer’s “potential liability under a future bad faith claim.”

The jury ultimately ruled the uninsured driver was 100 percent liable for the accident and calculated the full value of the plaintiff’s damages at $1 million. The judge ordered the insurer to immediately pay the $50,000 policy limit. The judge also “reserved jurisdiction” to decide any future bad faith claim against the insurer, which could leave the company on the hook for the rest of the $1 million.

The insurer appealed, arguing the trial judge should have allowed it to pay the $50,000 limit before trial, thereby “mooting” the plaintiff’s right to a jury determination of the total damages. In effect, the insurer said the plaintiff should have made its bad faith claim at the same time as his uninsured motorist claim, and having chosen not to do so, he should now be forced to re-litigate the entire case if he wants to pursue the bad faith issue.

The Florida Supreme Court decided this made no sense. In a 5-2 decision, the Court said the insurer’s delay tactics in this case should not be rewarded. The insurer’s “confessing judgment on the eve of trial” was designed to avoid a jury calculation of the plaintiff’s total damages—a figure that is “binding” in any subsequent bad faith action the plaintiff brings against the insurer. Forcing the plaintiff to re-litigate this issue would be “unduly and unnecessarily burdensome to him,” the Court said.

Get Legal Help Following a Car Accident

As this case illustrates, car accident litigation is often a lengthy, complex process that can take years to resolve. That is why it is important you work with an experienced Clearwater personal injury lawyer who understands the legal system and can effectively represent your interests. Contact the Law Office of Paul B. Genet, P.A., at 727-510-8802 if you need to speak with someone about your case today.

It is very unlikely that an uninsured or underinsured driver has sufficient funds to compensate you personally. It is therefore crucial that you obtain sufficient coverage of your own in case there is an accident.

Limits of Florida no-fault (PIP) coverage

Florida law does not obligate you to purchase uninsured motorist coverage (UMC). Many insureds choose not to purchase UMC, because they incorrectly believe that their personal injury protection (PIP) covers all of their damages. Many car accidents cause grave injuries that necessitate expensive medical treatments exceeding the $10,000 PIP coverage for serious injuries requiring emergency medical treatment.

Protections of uninsured motorist coverage

Florida obligates your insurance company to offer you the option of UMC. UMC may be beneficial for the following reasons:

• It covers lost wages and medical expenses not covered by your PIP and health insurance.
• It travels with you — you are covered if you are injured as a pedestrian or on your bicycle.
• It covers injured family members.
• It provides protection if you are injured by a hit-and- run motorist.
• It offers protection against “phantom” motorists who made no contact with your vehicle but caused your accident through their actions.

With many Floridians still affected by the recession, more and more drivers are reducing or dropping their basic auto insurance altogether. Consider supplementing your PIP coverage with UMC for your own protection.

If your insurance compensation is insufficient to cover your damages for personal injuries, you     may require an aggressive Florida accident attorney to help you obtain compensation.