An ambiguous auto insurance policy will be interpreted in favor of the insured. The thinking goes that it’s the insurance company that writes the policy, so it’s the insurance company’s responsibility to make sure the terms and conditions are clear. To the extent those terms and conditions are not clear, the insurer will get the upper hand.
Take the recent case of State Farm Mut. Auto. Ins. Co. v. Jakubowicz. This was an Indiana Supreme Court case in which the insurer’s underinsured motorist policy contained conflicting requirements. On one hand, insureds were required to file their UIM claim within three years. On the other hand, insureds could not first file a UIM claim unless and until they had exhausted the insurance coverage of the at-fault underinsured motorist. There was no mention of how to proceed if the insurance coverage of the at-fault motorist hadn’t been exhausted by the time that three-year time clock was up.
When the terms of an auto insurance policy are ambiguous, claims can sometimes be negotiated fairly out-of-court with the help of an experienced attorney. However, there are many situations in which the insurer is not going to be satisfied to do that. Your car accident lawyer has to be prepared to take the case to court and fight, if need be.
In the Jakubowiczs case, plaintiff and her two sons were seriously injured in a car accident with an underinsured driver.
For those not familiar, an underinsured driver is one who does have insurance coverage, but it is not enough to cover the full extent of damages suffered by the person injured. This is common, as some of the most serious auto collisions can result in hundreds of thousands or even millions of dollars in damages for medical expenses, pain and suffering, property damage and lost wages and loss of future earnings.
The statute of limitations on personal injury claims in Indiana is three years (it’s four in Florida). Plaintiff filed her claim against the at-fault driver one year after the car accident, seeking damages for medical expenses and property damage on behalf of herself and her sons.
Just shy of three years, she notified the insurance company she planned to file an underinsured motorist claim. However, it wasn’t until after that three-year mark that she formally filed a motion for leave to amend her complaint to include her own insurer and a claim for underinsured motorist coverage.
Trial court granted her leave, but the insurer soon thereafter moved for summary judgment, arguing the three-year time limit – per the language of the policy – was up and she had waited to long to file her UIM claim.
Plaintiff opposed that motion, arguing she didn’t have a choice but to wait because she hadn’t yet exhausted the UIM driver’s auto insurance coverage.
Trial court denied the insurer’s motion for summary judgment. The appellate court reversed. The case went to the state supreme court, which reinstated the ruling of the trial court.
In its finding, the state supreme court ruled that while insurers are free to limit the coverage in their policies, those limitations have to be clearly expressed in order to be enforceable, and they can’t be in conflict with other provisions of the contract. Where provisions that limit coverage aren’t plainly and clearly expressed, the policy is going to be construed most favorably to the insured – and that’s what happened here.
If you have been a victim of a traffic accident, call Chalik & Chalik at (954) 476-1000 or 1 (800) 873-9040.
State Farm Mut. Auto. Ins. Co. v. Jakubowicz, July 26, 2016, Miami Car Accident Lawyer Blog
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