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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 In a footnote, Judge James Kirsch noted that I.C. Section 27-7-5-1.5 has been repealed effective Jan. 1, 2010.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. Well, maybe it's because they are unelected, and, they have a tendency to strike down laws by elected officials from all over the country. When you have been taught that "Democracy" is something almost sacred, then, you will have a tendency to frown on such imperious conduct. Lawyers get acculturated in law school into thinking that this is the very essence of high minded government, but to people who are more heavily than King George ever did, they may not like it. Thanks for the information.

  2. I pd for a bankruptcy years ago with Mr Stiles and just this week received a garnishment from my pay! He never filed it even though he told me he would! Don't let this guy practice law ever again!!!

  3. Excellent initiative on the part of the AG. Thankfully someone takes action against predators taking advantage of people who have already been through the wringer. Well done!

  4. Conour will never turn these funds over to his defrauded clients. He tearfully told the court, and his daughters dutifully pledged in interviews, that his first priority is to repay every dime of the money he stole from his clients. Judge Young bought it, much to the chagrin of Conour’s victims. Why would Conour need the $2,262 anyway? Taxpayers are now supporting him, paying for his housing, utilities, food, healthcare, and clothing. If Conour puts the money anywhere but in the restitution fund, he’s proved, once again, what a con artist he continues to be and that he has never had any intention of repaying his clients. Judge Young will be proven wrong... again; Conour has no remorse and the Judge is one of the many conned.

  5. Pass Legislation to require guilty defendants to pay for the costs of lab work, etc as part of court costs...

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