Denied UIM Claim in Arizona What happened next

Feeling frustrated with your insurance coverage in Arizona after an accident? You’re not alone—many face similar issues. Knowing the law is crucial to handle these situations effectively. This article will explore a landmark court decision that illustrates how to resolve such disputes.

Situation

Specific Circumstances

In Arizona, there was a case involving an insurance dispute between a woman and her insurance company, The Travelers Indemnity Company of America. One sunny afternoon, she was in a car accident caused by her husband, who was driving negligently. The unfortunate accident led to her husband’s death and left her and four others injured. They had an auto insurance policy that included liability coverage and underinsured motorist (UIM) coverage. The total liability coverage was $300,000, which had to be divided among all the injured parties. This split left the woman with not enough money to cover her medical bills and other damages. So, she decided to seek additional money through the UIM coverage in her policy.

Plaintiff’s Argument

The woman, who was injured, argued that even though she received some money under the liability coverage, it wasn’t enough. She believed she still deserved the UIM coverage to make up for the shortfall in compensation for her injuries. Her argument was that the policy’s rule of not allowing UIM coverage if liability payment was made conflicted with Arizona’s insurance laws. These laws are meant to ensure that people get adequate compensation when the person responsible for the accident doesn’t have enough insurance to cover all the damages.

Defendant’s Argument

The insurance company, The Travelers Indemnity Company of America, argued that their policy clearly stated UIM coverage was not available if the claimant had already received any payment under the liability coverage. They believed that allowing the woman to claim both would effectively increase the liability limits without her paying for it, which they argued was against legal rules. They also said that the exclusion was valid and prevented “stacking” of insurance coverages, which means combining different coverages to get more money.

Judgment Result

The court ruled in favor of the woman. The judgment concluded that the exclusion of UIM coverage based on receiving liability payments was not valid under Arizona law. The court determined that she was entitled to UIM coverage to cover the difference between the liability payments she received and her total damages, up to the UIM coverage limit she had purchased. As a result, the woman was awarded additional compensation from the UIM policy to cover the shortfall in her damages. (CV-99-0370-PR)

Solution

Immediate Actions

If you find yourself in a similar situation, the first thing to do is to gather all your insurance documents. Make sure you understand what your policy covers, including both liability and UIM coverage. If you’re unsure, contact your insurance agent for clarification. It’s important to keep records of all communications with your insurance company, including emails, letters, and phone calls.

Filing a Lawsuit

If you believe you’re entitled to UIM coverage but your insurance company denies it, consider consulting with a lawyer who specializes in insurance claims. A lawyer can help you understand your rights and whether you have a strong case. If you decide to file a lawsuit, your lawyer will guide you through the process. This includes drafting the necessary legal documents and presenting your case in court. In Arizona, the case of Taylor v. Travelers Indemnity Company of America (CV-99-0370-PR) can serve as a precedent, showing that policy exclusions for UIM coverage might not hold up in court.

Negotiation and Settlement Strategies

Before taking legal action, it’s often wise to try to negotiate with your insurance company. You or your lawyer can present your case and explain why you believe you’re entitled to UIM coverage. Sometimes, showing that you’re willing to pursue legal action can encourage the insurance company to settle the claim out of court. If a settlement is offered, make sure to evaluate whether it fully compensates your damages before accepting.

FAQ

What is UIM?

Underinsured Motorist (UIM) coverage is insurance designed to help you if the driver who caused your accident doesn’t have enough insurance to cover all your damages. It kicks in to make up the difference between what the at-fault driver’s insurance pays and what you still owe for things like medical bills and car repairs.

What does “Policy Limits” mean?

Policy limits refer to the maximum amount of money your insurance company will pay under a specific coverage. In the context of UIM, it’s the most they will pay you for damages caused by an underinsured driver.

Can UIM be “Stacked”?

Stacking means combining the coverage limits from multiple insurance policies to increase the total amount available for a claim. In Arizona, stacking is generally restricted unless it’s specifically allowed in your policy.

What is “Anti-stacking”?

Anti-stacking provisions are rules that prevent you from combining the coverage limits of multiple insurance policies for a single incident. This means you can’t increase your payout by using multiple policies together.

Is UIM Mandatory?

In Arizona, insurance companies must offer UIM coverage, but you are not required to buy it. It’s optional but can be helpful if you’re in an accident with an underinsured driver.

How is UIM Calculated?

UIM coverage is calculated by subtracting the at-fault driver’s liability insurance from your total damages. The UIM coverage then pays up to its limit to help cover the remaining costs.

Does UIM Apply to Family Members?

Yes, UIM coverage can apply to family members listed on your policy. This means it can provide protection in accidents caused by underinsured drivers, even if a family member is the one injured.

Can UIM Cover Passengers?

UIM can cover passengers in your vehicle if they’re injured by an underinsured motorist, depending on the specific terms of your policy.

What if the At-Fault Party Has No Insurance?

If the person who caused the accident has no insurance, Uninsured Motorist (UM) coverage, rather than UIM, would apply to help cover your damages.

Can UIM Claims Be Denied?

Yes, UIM claims can be denied if you don’t meet the terms of your policy. For instance, if you’ve already received payments exceeding the UIM limits, your claim might be denied.