Insurer Must Offer Excess UM/UIM Coverage But is Not Required to Force Insured to Buy It
Florida’s Uninsured/Underinsured Motorist statute, like similar statutes across the country, requires that an insured offer UM/UIM coverage equal to the amount of third party liability insurance provided. The statute does not, however, require the insured to buy the full coverage. In Maria Theresa Guaniro Zamora, Alex Tantalean, Cecilia Delgado, Sonia Carranza v. Ace American Insurance Company, No. 20-10476, United States Court Of Appeals For The Eleventh Circuit (September 23, 2020) the Eleventh Circuit was asked to compel an insurer to provide limits that was not ordered by the insured.
Maria Theresa Guaniro Zamora, an Alamo Rent-A-Car customer, purchased an insurance policy from Ace American Insurance Company. Zamora’s policy included $100,000 of excess uninsured/underinsured motorist (UM/UIM) coverage that had been issued by Ace to the named insured, Enterprise Holdings, Inc. Zamora rejected additional excess UM/UIM coverage beyond the limits set forth in Enterprise Holdings’ policy with Ace.
Florida Statutes require insurers to make available limits of excess UM coverage up to the bodily injury liability limits contained in such policy or $1 million, whichever is less. After an uninsured/underinsured motorist and Zamora were involved in an accident resulting in serious injuries, Zamora demanded payment. Ace responded that only $100,000 in excess UM/UIM coverage was available.
The district court granted Ace’s motion for summary judgment and denied Zamora’s, holding that Ace complied with the statute because: (1) Ace offered excess UM coverage to its named insured, Enterprise Holdings, and (2) the rental car customer, Zamora, signed a rental agreement accepting the terms of Enterprise Holdings’ excess UM coverage.
The Florida Statute governs the extent to which motor vehicle liability insurance policies delivered or issued for delivery in Florida must make uninsured motor vehicle coverage available. Neither party disputes that the applicable provision of the statute here provides: “[A]n insurer issuing [an excess motor vehicle] policy shall make available as a part of the application for such policy, and at the written request of an insured, limits [of excess UM coverage] up to the bodily injury liability limits contained in such policy or $1 million, whichever is less. Florida courts have interpreted “make available” in the statute as meaning “to offer.”
Enterprise Holdings, faced with (1) completely rejecting excess UM coverage, (2) selecting $100,000 of coverage, or (3) selecting $1,000,000 of coverage, made the second choice.
The majority of courts that have considered the issue of who may question the lack of an insurable interest hold that only the insurer can raise the objection of want of an insurable interest.
Zamora signed a rental agreement stating that “OWNER AND RENTER REJECT ANY ADDITIONAL UM/UIM COVERAGE TO THE EXTENT PERMITTED BY THE LAW.” This rejection established that an offer had been made and was rejected. As a result it satisfied the statute because Ace offered the insured customer, Zamora, the opportunity to either (1) accept the $100,000 in excess UM/UIM coverage by signing the rental agreement or (2) opt for higher excess UM/UIM coverage by rejecting the rental agreement. Ace’s offer was entirely compliant with the manner in which courts have interpreted the statute which requires an excess liability insurer at least to inform its insureds of the option of acquiring excess UM/UIM coverage. The statute only requires an issuer of a non-primary policy to notify an applicant of the availability of UM/UIM coverage.
ACE’s policy with Enterprise Holdings, and the terms incorporated by Zamora in the rental agreement, included excess UM coverage in the amount of $100,000. The excess insurer, Ace, offered excess UM coverage to the named insured, Enterprise; the named insured simply chose to purchase the lower limit of the policy. The Eleventh Circuit concluded that, accordingly, Ace complied with the statute, § 627.727(2) and the holding of the District Court was affirmed.
Everyone seems to want to pay the lowest premium offered and will accept low limits of liability since they believe they will never be injured and not need the excess limits that – of course – cost more than the higher limits. Then, when a person gets hurt they want to get the money they need so they sue the insurance company saying they were allowed to get more money by claiming violation of statute. Sometimes it works. In this case Maria Theresa Guaniro Zamora’s attempt failed.
© 2020 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and email@example.com.
Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.
Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.
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