UIM Statute Limited Coverage to Same as UM Coverage
Barry Zalma
Oct 25, 2023
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THE STATUTE CONTROLS
Majdoleen A. Khattab, Administratrix of the Estate of Affan Mohamad Khattab, ("Appellant" or "the Estate" ), appealed the district court's order granting summary judgment for Berkley Regional Insurance Company and Integon General Insurance (collectively, "the insurers" ), and entering an order of declaratory judgment in favor of the insurers.
In Majdoleen A. Khattab, Administrator, Estate of Affan Mohamad Khattab v. Berkley Regional Insurance Company; Integon General Insurance Corporation, No. 22-1462, United States Court of Appeals, Fourth Circuit (October 19, 2023) the Fourth Circuit interpreted the clear language of the statute and UM/UIM coverages.
ISSUES
At issue is an insurance policy issued by Berkley Regional Insurance Company. The policy has a general liability limit of $1,000,000 and an uninsured motorist coverage limit of $70,000. This case solely turns on the legal question of what the relevant coverage limit under the insurance policy is for an accident caused by a motorist whose insurance coverage is less than the amount of claimed damages and less than the amount of the general liability limit, but greater than the amount of the uninsured motorist coverage limit.
Virginia mandates that an insurance policy's uninsured motorist coverage limits must match the policy's liability limits unless any one named insured rejects the additional uninsured motorist coverage by notifying the insurer as provided in the statute. There is no dispute that Berkley complied with the notice requirement for "uninsured/underinsured coverage limits" pursuant to the statute. There was no dispute that the insured properly limited the uninsured coverage to $70,000.
With respect to underinsured coverage the statute provides that the policy shall also provide underinsured motorist insurance coverage with limits that shall be equal to the uninsured motorist insurance coverage limits and shall obligate the insurer to make payment for bodily injury or property damage caused by the operation or use of an underinsured motor vehicle to the extent the vehicle is underinsured.
Appellant argues, the underinsured coverage limit remained at $1,000,000, equal to the policy's general liability limit. However, Appellant did not pay for a UIM coverage of $1 million.
Appellant overlooks that the statutory default sets underinsured motorist coverage equal to uninsured motorist coverage, not the policy's general liability limit.
Because the uninsured motorist coverage was properly limited to $70,000, and the policy does not provide for underinsured motorist coverage different from the statutory default, the district court correctly concluded that the applicable coverage limit was $70,000.
Accordingly, the Fourth Circuit Court of Appeals affirmed.
ZALMA OPINION
It appears to me to be ridiculous to buy liability insurance with limits of $1 million to protect third parties that might be hurt by the insured but refuse to buy the same limit or more if the insured is injured by an uninsured or underinsured motorist. The insured sought the coverage that was needed, not the coverage ordered.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
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When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.
On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive ...
