COA: Law doesn’t require insurer to provide UIM coverage

July 14, 2016

A trial court erred by denying an insurance company’s motion for summary judgment regarding underinsured motorist coverage because a law change in 2005 no longer required it to provide that coverage.

Matthew Ackerman was injured in a car accident in January 2009 allegedly caused by Janet Sipes, resulting in the amputation of one of Ackerman’s legs. He was employed by Evansville Marine Service Inc., which had an excess or umbrella policy with Fireman’s Fund Insurance Co., and uninsured/underinsured motorist coverage, and workers’ compensation benefits with separate insurance companies.

Ackerman sued Fireman’s Fund after he received only $1 million in payout from Sipes’ policy and Evansville’s UM/UIM coverage. He sought additional UM/UIM coverage from the Fireman’s Fund.

It filed for summary judgment, arguing its policy didn’t provide that coverage and that coverage could not be imputed to the policy, which the trial court denied. The Indiana Court of Appeals accepted the case on interlocutory appeal.

The policy in question was first issued in March 2004 to Evansville Marine and beginning in September 2004, it was issued or renewed each year effective Sept. 16.

In 1999, the Indiana Supreme Court decided United National Insurance Co. v. DePrizio, 705 N.E.2d 455 (Ind. 1999), which concerned whether an insurance policy like the one at issue in the instant case, was required to provide UM/UIM coverage. It concluded that “absent an explicit statutory exemption to the contrary,” an umbrella liability policy, even if it does not provide for UM/UIM coverage by its own terms, yet provides coverage for liability arising from the ownership maintenance or use of motor vehicles, falls under I.C. 27-7-5-2(a). As such, it is required to provide UM/UIM coverage.

In response, the Legislature enacted I.C. 27-7-5-1.5, effective July 1, 2005, which eliminated that coverage.

The parties in Ackerman’s case dispute whether that statute applies or if Fireman’s Fund was still required to provide UIM coverage at the time the 2008 policy, which did not expressly provide UIM coverage, was issued.

The Court of Appeals relied on Hall v. Travelers Property Cas. Co. of America, No. 3:08-CV-0007RLYWGH, 2009 WL 1148231 (S.D. Ind. 2009), to reverse the trial court.

“The term ‘issuance’ is not explicitly limited to newly-issued policies and encompasses renewal policies,” Judge Michael Barnes wrote.

“As in Hall, we conclude that Indiana Code Section 27-7-5-1.5(b) applied to both newly-issued policies and renewal policies. Regardless of whether the 2008 policy was a renewal or a newly issued policy, Fireman’s Fund was not required to include UM/UIM coverage in the policy. Both Ackerman and AER assert that a genuine issue of material fact exists as to whether the 2008 policy was a newly issued or renewal policy, but we conclude that fact is not material.”

The case, Fireman's Fund Insurance Company v. Matthew W. Ackerman and American Casualty Co., 82A01-1509-CT-1350, is remanded for further proceedings.


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