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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Happy Law Day
ZIFL – Volume 30, Issue 9 – May 1, 2026
Read the full article at https://www.linkedin.com/pulse/zalmas-insurance-fraud-letter-may-1-2026-barry-zalma-esq-cfe-2tywc, see the video at at and at https://zalma.com/blog plus more than 5300 posts.
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
ZIFL – Volume 30, Issue 9 – May 1, 2026
Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year and is written by Barry Zalma.
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In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
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Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
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A first party property policy does not insure property: it insures a person, partnership, corporation or other entity against the risk of loss of the property. Before an insured can make a claim for indemnity under a policy of first party property insurance the insured must prove that there was damage to property the risk of loss of which was insured by the policy. The obligation imposed on the insured ...
