Tuesday, December 20, 2016

Rejection of UIM Coverage Form Found Invalid by Philadelphia County Court

In a recent decision out of the Philadelphia County Court of Common Pleas in the case of Bielec v. National Union Fire Ins. Co., 2016 WL 7157620 (C.P. Phila. Co. Dec. 5, 2016 Djerassi, J.), the court addressed the issue of whether a rejection of under-insured motorist ("UIM") coverage was valid where statutory language requirements were not followed under 75 Pa. C.S.A. § 1731 et seq. of the Motor Vehicle Financial Responsibility Law ("MVFRL").

The case also involves policy considerations concerning a plaintiff, who was an employee of defendant Verizon Communications, Inc., and that company's attempt to decline UIM benefits for its fleet of vehicles without notifying plaintiff.  The court noted that, without this notice, the plaintiff did not arrange for UIM coverage for instances when he was driving Verizon vehicles during work hours.

According to the Opinion, the plaintiff had an accident on the job while driving a Verizon truck and was struck by an automobile at a traffic light.  The plaintiff brought suit after he was precluded from asserting a UIM claim on Verizon's policy with defendant National Union Fire
Insurance Company.

The court found under a textual and policy analysis that Verizon's rejection of UIM coverage was void.  As such, summary judgment was granted in favor of the  plaintiff.
More specifically, the court found that Verizon's UIM rejection form deemed invalid because it did not comply with MVFRL in that several paragraph's in the form separated the UIM rejection statement from the authorized signature at bottom of form with one of the intervening
paragraphs purporting to reject UIM stacking as well.

The court also reasoned that even if the rejection form was valid, it would be rejected on public policy grounds because Verizon never told its employee that UIM coverage had been
rejected.  The court believed that an employer who fails to notify its employee that UIM coverage has been rejected is acting against public policy.  The court otherwise noted that Verizon's lack of notice undermined the MVFRL's policy to protect people from risk of injury caused by a negligent driver who lacks adequate insurance.

As stated, the court ultimately found that Verizon's waiver of UIM without notice to its employee driver was void.  Accordingly, National Union Fire Insurance Company, which was Verizon's commercial auto insurer, was ordered to provide UIM benefits up to the statutory limit that National was obligated to offer.

Anyone wishing to review this decision may click this LINK.

I send thanks to Attorney Scott Cooper of the Harrisburg, PA law firm of Schmidt Kramer for bringing this case to my attention.

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