ILNews

Insurer must provide underinsured coverage

Back to TopE-mailPrintBookmark and Share

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 In a footnote, Judge James Kirsch noted that I.C. Section 27-7-5-1.5 has been repealed effective Jan. 1, 2010.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."

 

ADVERTISEMENT

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. My name is joan, I live in United kingdom..I am here to say a big thank you to Dr odun for helping me and making me smile again, after reading a lot of testimonies about Dr odun i wrote him and told him to help me restore my marriage as my home have been scattered for 3yrs now, He replied my email and told me to send my pic and my husband pic and some other things, which i did and he said he will be done in 48hrs, with hope i slept and on the 3rd day Nathaniel called me and asked if i could pack my things to his place and forgive him, i was shocked and this is how dr odun helped me in restoring my. home Contact him: drodunhealinghome@aol.com or his website on drodunhealinghome.webs.com

  2. Indianapolis Bar Association President John Trimble and I are on the same page, but it is a very large page with plenty of room for others to join us. As my final Res Gestae article will express in more detail in a few days, the Great Recession hastened a fundamental and permanent sea change for the global legal service profession. Every state bar is facing the same existential questions that thrust the medical profession into national healthcare reform debates. The bench, bar, and law schools must comprehensively reconsider how we define the practice of law and what it means to access justice. If the three principals of the legal service profession do not recast the vision of their roles and responsibilities soon, the marketplace will dictate those roles and responsibilities without regard for the public interests that the legal profession professes to serve.

  3. I have met some highly placed bureaucrats who vehemently disagree, Mr. Smith. This is not your father's time in America. Some ideas are just too politically incorrect too allow spoken, says those who watch over us for the good of their concept of order.

  4. Lets talk about this without forgetting that Lawyers, too, have FREEDOM OF SPEECH AND ASSOCIATION

  5. Baer filed with the U.S. Court of Appeals Seventh Circuit on April 30 2015. When will this be decided? How many more appeals does this guy have? Unbelievable this is dragging on like this.

ADVERTISEMENT