Pennsylvania Federal Middle District Court Addresses UIM Sign-Down Forms

In his recent November 4, 2013 decision in the case of Horn v. State Farm Mut. Auto. Ins. Co., Civil Action No. 1:12-CV-1556, 2013 WL 5937341 (M.D. Pa. Nov. 4, 2013), Chief Judge Christopher C. Conner of the Middle District issued an Order adopting the Report and Recommendation of Chief Magistrate Judge Martin C. Carlson pertaining to the issue of the necessity of sign-down forms for UIM coverage.

In this matter, the court ruled that an ex-wife claimant was entitled to $100,000 in UIM coverage and not $15,000 which had been the level of coverage on the policy when her ex-husband was the first named insured.

According to the decision, the ex-wife had assumed policy once she and her husband divorced.  The ex-wife kept the liability limits the same at $100/300,000 but changed the policy to full tort from limited tort.

The court noted that the main distinguishing factor in this case from the case of  Nationwide Mut. Ins. Co. v. Buffetta, 230 F.3d 634 (3d Cir. 2000), is the form the ex-wife signed when she assumed the policy.  The new form in this Horn case contained language that UM/UIM levels were required to match her liability limits unless she wished reduced coverages and provided blanks in the form for her to complete, which she did not.

The ex-wife did, however, sign the new form, which was titled "Acknowledgement of Coverage Selection Form." 

State Farm contended that a new sign down form was not needed and that the ex-wife was entitled to only $15,000 in UM/UIM, which the carrier paid out.

In Horn, the court agreed that State Farm was not under a legal obligation to obtain a new sign down form when ex-wife assumed the policy.  However, the document that the ex-wife signed reflected that UM/UIM would be 100/300 unless she elected lower coverages.

As such, the court found that the insured ex-wife essentially made an affirmative act of declining to reduce her UM/UIM levels, thereby distinguishing this case from the Buffetta case.

Moreover, the court in Horn noted that, in any doubtful or close case, the insured should be afforded the greatest coverage.  In the end, the court granted the ex-wife’s motion for summary judgment and awarded her the amount of the unpaid $85,000.00.

I send thanks to Attorney Bill Mabius of the Pennsylvania Association for Justice for bringing this decision to my attention.

Anyone desiring a copy of the same may click this LINK.