Thursday, July 29, 2021

Carrier's UIM Rejection Forms and Renewal Forms Upheld as Valid


In the case of Keeler v. Esurance Insurance Services, Inc., No. 2:20-CV-00271 (W.D. Pa. July 12, 2021 Kelly, M.J.), Federal Western District Court Magistrate Judge Maureen P. Kelly issued a Report and Recommendation recommending that the court grant the Motion for Summary Judgment filed by the carrier and denied the Motion for Partial Summary Judgment filed by the Plaintiffs in a UIM bad faith litigation.

According to the Opinion, the Plaintiff was involved in a motorcycle accident and recovered against the third party tortfeasor and then pursued a UIM claim against Esurance.

The carrier denied the UIM claim under an argument that the Plaintiff did not purchase UIM benefits when he first obtained the policy and did not add UIM coverage with any subsequent renewal.

The Plaintiffs asserted that the carrier’s UIM rejection form did not comply with the MVFRL because the statutorily required language was not printed in a prominent font or in a prominent location in the carrier’s policy. As such, the Plaintiff asserted that the rejection form was void and that UIM benefits must therefore be provided in an amount equal to the bodily injury liability coverage purchased.

Separately, the Plaintiffs also asserted that the carrier’s policy renewal forms omitted a required reminder notice indicating to the insured that the policy did not provide UIM benefits. The Plaintiffs again asserted that this alleged error on the part of the carrier resulted in the carrier being required to provide UIM coverage.

In response, the carrier asserted that its UIM rejection form complied with Pennsylvania law and that, when the Plaintiff signed that form, he offered up a valid written rejection of the offer of UIM coverage.

With regard to the policy renewals, although the carrier conceded that its form lacked the language required by MVFRL to inform policyholders that UIM coverage is not provided under the policy, the carrier held that the Plaintiffs could not be provided with UIM coverage as a result because the Pennsylvania Legislature had not provided for any remedy in any statute for this scenario.

The carrier sought a judgment in its favor as to the Plaintiff’s bad faith claim under the argument that the carrier had acted reasonably and in good faith given that the Plaintiff had affirmatively rejected UIM benefits.

Based upon the above rulings, the court granted the carrier summary judgment after finding that the carrier had an objectively reasonable basis to deny coverage based upon the Plaintiff’s valid rejection of UIM benefits.

Anyone wishing to review a copy of this decision may click this LINK.


I send thanks to Attorney Joseph Hudock of the Pittsburgh office of the law firm of Summers McDonald, Hudock, Guthrie & Rauch, P.C. for bringing this case to my attention.

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