Tuesday, February 28, 2012

Pennsylvania Superior Court Strictly Applies Statutory Mandates for UIM Rejection Forms

In its recent decision in the case of Jones v. Unitrin Auto and Home Insurance Company, No. 397 W.D.A. 2011 (Pa. Super. Feb. 6, 2012 Musmanno, Alan and Mundy J.J.), (Opinion by Mundy, J.) (Alan J. dissenting), Court addressed coverage issues raised in a declaratory judgment action filed by an injured party insured in an underinsured (UIM) motorist benefits claim.

The question presented in this case centered around whether inclusion of additional language by the UIM carrier on its underinsured motorist insurance rejection form contained in the insured’s application failed to specifically comply with the statutory requirements and was therefore void.

Under 75 Pa. C.S. §1731, mandated requirements are set forth for the language of a rejection of underinsured motorist benefits form. According to the Opinion, the Unitrin Auto & Home Insurance Company UIM rejection form included all of the language mandated by §1731(c), (c.1), but also included an additional sentence that was not in the statutory form. The additional sentence read: “By rejecting this coverage, I am also signing the waiver on P. 13 rejecting stacked limits of underinsured motorist coverage.”

The Superior Court held that by including the additional language noted, the carrier failed to specifically comply with the statutory requirements with regards to the underinsured motorist insurance rejection form and, as such, the form was found void.

In reaching this decision, the Court noted that there was no appellate decisions addressing the affect of additional words on the validity of §1731(c) rejection form.

The Jones v. Unitrin court analyzed other decisions surrounding this issue, such as decisions addressing a carrier’s omission of certain words from the required form, American Intern. Ins. Co. v. Vaxmonsky, 916 A.2d 1106 (Pa. Super. 2006), and the Pennsylvania Supreme Court decision regarding whether the mandated form had to appear alone on a single page (it does not), Winslow-Quattlebaum v. Maryland Ins. Group, 752 A.2d 878 (Pa. Super. 2000).

Noting that the prior decisions have required that the subject form “specifically comply” with the requirements of §1731(c), the Superior Court in this Jones v. Unitrin case found that by adding a sentence to the form between the required language and the signature line, which sentence did not directly relate to the rejection of UIM coverage, the Unitrin UIM rejection form did not “specifically comply” with §1731(c) as required by §1731 (c.1).

In so ruling, the Pennsylvania Superior Court also refused to follow the prior decision of the Middle District Federal Court of Pennsylvania in the case of Unitrin Auto & Home Ins. Co. v. Heister, 2005 W.L. 2314372 (M.D. Pa. 2005) in which that court held that a UIM rejection form identical to the one at issue in this matter did specifically comply with §1731(c).

In sum, the Jones v. Unitrin Pennsylvania Superior Court held that the carrier’s additions to the prescribed language represented a deviation from the requirements of §1731 on the UIM rejection form rendered that form void. As such, the case was remanded back to the trial court for further proceedings.

Anyone desiring a copy of this case may contact me at dancummins@comcast.net

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