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Insurer must provide underinsured coverage

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An insurance policy that doesn't provide uninsured or underinsured motorist coverage to all insureds is contrary to public policy based on Indiana statute, affirmed the Indiana Court of Appeals. Based on the statute, the insurance company is required to provide $500,000 in underinsured motorist coverage to a man injured while driving a company-provided motorcycle.

In Joseph Balagtas and Federated Mutual Insurance Co. v. Harry Joe Bishop, No. 79A02-0903-CV-239, Federated Mutual Insurance appealed the trial court order denying its motion for summary judgment and granting Harry Bishop's motion for summary judgment in his claim for underinsured motorist coverage. Bishop is an employee of Eagle Motors, who is insured through Federated. Eagle provided Bishop a demo motorcycle for business and personal use with full coverage insurance. While he was driving it during personal use, he was hit by Joseph Balagtas and injured. Bishop's damages exceeded Balagtas' policy limits so he sought payment under the UIM of Eagle's policy. Federated claimed he wasn't covered because Eagle elected to only have UM/UIM coverage for directors, officers, partners, or owners of the named insured and family members who qualify as insureds. Bishop didn't fit any of those titles.

The issue for the appellate court to decide was if Eagle could elect limits for UM/UIM coverage for some insureds and decline the same coverage for other insureds. Indiana Code Section 27-7-5-2 says an insurer is required to make available UM and UIM coverage in limits at least equal to a policy's bodily injury limits of liability. Federated argued that statute didn't apply to them because I.C. Section 27-7-5-1.5 states an insurer is not required to make available UM/UIM coverage in connection with the issuance of a commercial vehicle policy. The appellate court rejected that argument and held Federated intended to comply with I.C. Section 27-7-5-2 based on its policy language. In a footnote, Judge James Kirsch noted that I.C. Section 27-7-5-1.5 has been repealed effective Jan. 1, 2010.

Under Indiana Code Section 27-7-5-2(b), the insured may reject on behalf of all named insureds and other insureds either the UM or UIM coverage provided or both the UM and UIM coverage. The statute doesn't say that the named insured may reject coverage for some, but not all of the named insureds, so election or rejection of coverage must apply to everyone, wrote Judge Kirsch.

"Indiana Code section 27-7-5-2 is a mandatory coverage, full-recovery, remedial statute," he wrote. "Insurers operating in Indiana are required to set minimum standards of protection that the legislature has deemed acceptable. We will not approve any clause, exception, or exclusion that attempts to subvert or narrow the intent of the legislature. Any language in an insurance policy that dilutes statutory protections is contrary to public policy."

 

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  1. From his recent appearance on WRTV to this story here, Frank is everywhere. Couldn't happen to a nicer guy, although he should stop using Eric Schnauffer for his 7th Circuit briefs. They're not THAT hard.

  2. They learn our language prior to coming here. My grandparents who came over on the boat, had to learn English and become familiarize with Americas customs and culture. They are in our land now, speak ENGLISH!!

  3. @ Rebecca D Fell, I am very sorry for your loss. I think it gives the family solace and a bit of closure to go to a road side memorial. Those that oppose them probably did not experience the loss of a child or a loved one.

  4. If it were your child that died maybe you'd be more understanding. Most of us don't have graves to visit. My son was killed on a state road and I will be putting up a memorial where he died. It gives us a sense of peace to be at the location he took his last breath. Some people should be more understanding of that.

  5. Can we please take notice of the connection between the declining state of families across the United States and the RISE OF CPS INVOLVEMENT??? They call themselves "advocates" for "children's rights", however, statistics show those children whom are taken from, even NEGLIGENT homes are LESS likely to become successful, independent adults!!! Not to mention the undeniable lack of respect and lack of responsibility of the children being raised today vs the way we were raised 20 years ago, when families still existed. I was born in 1981 and I didn't even ever hear the term "CPS", in fact, I didn't even know they existed until about ten years ago... Now our children have disagreements between friends and they actually THREATEN EACH OTHER WITH, "I'll call CPS" or "I'll have [my parent] (usually singular) call CPS"!!!! And the truth is, no parent is perfect and we all have flaws and make mistakes, but it is RIGHTFULLY OURS - BY THE CONSTITUTION OF THIS GREAT NATION - to be imperfect. Let's take a good look at what kind of parenting those that are stealing our children are doing, what kind of adults are they producing? WHAT ACTUALLY HAPPENS TO THE CHILDREN THAT HAVE BEEN RIPPED FROM THEIR FAMILY AND THAT CHILD'S SUCCESS - or otherwise - AS AN ADULT.....

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