Phone Call With Insurer Does Not Void Insured’s Prior Rejection of Coverage

A motorcycle driver’s signed waiver of underinsured motorists coverage in 2004 was still in effect 15 years later when he was in a tragic crash despite a phone conversation he had in 2014 with a representative for his direct insurer about his policy.

At the conclusion of the phone conversation, the insured added uninsured motorist (UM) coverage to his Progressive Direct Insurance motorcycle policy but the insurer representative never discussed the availability of underinsured motorist (UIM) coverage.

A Pennsylvania Superior Court has decided that the phone conversation did not alter the fact that the insured had previously signed a form rejecting UIM coverage. It reversed a trial court that had found that the phone conversation was sufficient to trigger Progressive Direct’s statutory obligation in the state to offer the insured both UIM and UI coverages and obtain a new affirmative rejection of UIM coverage.

According to the Superior Court, there is a presumption that the insured was advised of the benefits and limits available under his policy at the time of his original application for coverage in 2004. Thus, when he contacted Progressive Direct in 2014 and indicated that he wished to obtain more coverage on the existing policy, the Progressive Direct representative was not required to give him additional notice of a particular benefit or to obtain another UIM rejection form.

The Accident

The state’s motor vehicle law requires insurers to offer uninsured and underinsured motorist coverage. Insureds must sign and date separate forms to reject UI and UIM coverage.

On June 7, 2015, Bryan Koch was driving his 2013 Harley Davidson motorcycle while his wife was riding with him as a passenger. Their motorcycle was struck by a 1997 Ford Explorer driven by a driver who was later determined to be driving under the influence of alcohol. Koch’s wife was killed and Koch suffered injuries that required the amputation of his left leg above his knee. The parties do not dispute that the Ford Explorer driver, who was underinsured, was solely at fault for causing the accident.

Koch filed a breach of contract action asserting that Progressive Direct had breached the insurance policy by failing to properly and timely evaluate the claim and pay the UIM benefits.

Koch prevailed before the trial court which found that when he contacted Progressive Direct and sought more information about obtaining additional coverage, Koch made it “obvious” that he no longer wanted to reject the coverage that he had previously declined. Koch alleges that, had the Progressive Direct representative discussed the differences between UI and UIM coverage, he would have purchased both UI and UIM coverage

Progressive asserted that the original UIM rejection form Koch signed in 2004 remained valid at the time of the accident. The insurer presented evidence that it had consistently sent Koch policy renewals which stated that Koch had rejected UIM coverage.

After Koch had purchased uninsured motorist coverage insurance in 2014, Progressive sent Koch a policy renewal on January 3, 2015, which stated that the policy now included uninsured motorist coverage. This policy renewal listed the underinsured motorist bodily injury coverage as “rejected.”

The Superior Court rejected the argument that the conversation in 2014 created a duty or a legal obligation for the insurer representative to offer Koch UIM coverage, notify him about UIM coverage, or to obtain a new UIM rejection form where this coverage had been previously waived in a valid rejection form.

Topics Carriers