Our Fort Lauderdale car accidents have come to expect that most auto insurance companies facing down a claim for damages will take whatever action they can to avoid paying that claim – or at least minimize liability.
One such tactic occurs even long before the crash: It is to draft policies that contain a myriad of exceptions and loopholes and contingencies so as to deny coverage on different grounds. However, as the recent case of State Farm Mut. Auto. Ins. Co. v. Jakubowicz shows, this tactic can backfire when the language of the policy is ambiguous.
Courts across the country have held that when there is more than one meaning to the language in an auto insurance policy, the meaning that best favors the insured is the one that will be followed. That’s because courts have recognized that insurance companies, as the entities that draft the language of the policy, have the upper hand. It’s their responsibility to make sure the policy is clear.
In the Jakubowicz case, the issue before the Indiana Supreme Court involves a personal injury lawsuit and an underinsured motorist (UIM) coverage claim. UIM coverage, for those not familiar, is coverage that will kick in if an at-fault driver in a Fort Lauderdale car accident lacks adequate insurance to cover all victims’ losses.
In this particular case, the language of the UIM policy, drafted by defendant State Farm, asserted it would only pay UIM benefits for claims brought within three years of the accident. However, the claim also required insurers to fully comply with all provisions of the policy, which included a provision that, in order to assert damages for UIM coverage, the insured had to first collect all damages from the underinsured motorist’s insurer.
In essence, the insured was required to file the UIM claim within three years, which directly conflicts with the policy’s requirement to first exhaust the underinsured motorist’s insurance.
For this reason, the Indiana Supreme Court declared the policy ambiguous and construed it in favor of the insured.
The case started back in 2007. Plaintiffs – mother and her two minor sons – were involved in a car accident with an underinsured driver. Plaintiffs suffered substantial injuries.
Mother later sought compensation for the underinsured motorist for coverage of medical bills and property damage costs.
In late 2009, almost three years from the date of the accident, plaintiff put her own insurer on notice that she would likely be filing a UIM claim. However, that claim wasn’t formally filed until 2010, after the three-year mark.
Trial court had granted her leave to amend her claim to include a UIM claim, but defendant sought summary judgment, arguing the statute of limitations had expired.
The court of appeals accepted review of that decision and reversed the trial court, finding the insurance policy clearly stated plaintiff had just three years to file her UIM claim and had failed to do so within the allotted time.
The Indiana Supreme Court, however, reversed, reinstating the trial court’s ruling. In so doing, the state supreme court underscored the reasoning of the trial court, which was that the insurer could have easily just written a policy to say a UIM claim arising out of any incident had a cause of action of just three years, period. However, the insurer chose to add in a host of other conditions and limiting factors, rendering the policy ambiguous.
Call Fort Lauderdale Injury Attorney Richard Ansara at (954) 761-4011. Serving Broward, Miami-Dade and Palm Beach counties.
State Farm Mut. Auto. Ins. Co. v. Jakubowicz , July 26, 2016, Indiana Supreme Court
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