This action was brought by the plaintiff insurance company against the defendant insurance agency which the plaintiff alleged negligently failed to obtain the proper uninsured motorist selection form when it sold an insurance policy. As a result, the plaintiff faced exposure in the amount of $1 million in excess UM coverage.
The evidence showed that the defendant insurance agency sold an underlying automobile policy and did not obtain a UM selection form at the time of the application. The form was completed approximately two months after the policy was sold. The UM selection form stated that the insured sought to reject excess UM coverage. The excess coverage with the plaintiff insurance company was above a $1 million UM policy which the insured had with another company.
Six months after the policy went into effect, the insured was involved in an accident with an uninsured motorist. The insured sustained a debilitating brain injury as well as other orthopedic injuries in the accident. The insured contended that he did not understand the insurance selection form and that he actually wanted to accept the excess UM coverage offered by the plaintiff.
The plaintiff alleged that the defendant insurance agency’s failure to initially obtain the appropriate selection form entitled the insured in the underlying action to receive the $1 million in excess UM coverage from the plaintiff. The insured’s underlying personal injury action was arbitrated with an award for the plaintiff in the amount of $1,950,000.
The plaintiff contended that it was then faced with a $950,000 excess arbitration award. The plaintiff settled the UM claim brought by its insured for $415,000.
The defendant insurance agency argued that it had no duty to obtain the UM selection form at the time the insurance application was made.
The defendant provided the form two months after the policy went into effect, fulfilling its duty to the plaintiff, according to defense arguments. The defense maintained that the plaintiff failed to follow up after it received the insured’s application without the UM selection form attached. Evidence showed that the plaintiff had sent a letter to the defendant requesting the UM selection form, but that no further follow-up measures were taken by the plaintiff. The defense alleged that it did not have a copy of the UM selection form at the time the application was made. The defendant additionally maintained that the insured had rejected the UM coverage and was not entitled to the benefits claimed by the plaintiff.
The jury found the defendant 70% liable and the plaintiff 30% comparatively negligent. The plaintiff was awarded $415,000 which was reduced accordingly.
Reference
Capital Assurance Company vs. Fortune Insurance Agency. Case no. 91-43546; Judge Eleanor Schokket, 1-16-97.
Attorneys for plaintiff: Gregory P. Hengber and Hugh L. Wood of Wood & Quintairos in Miami; Attorney for defendant: Pete L. DeMahy of Smith, DeMahy, Drake, Cozad & Cabeza in Miami.
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The case(s) cited herein was(were) reprinted with the permission of the publisher Jury Verdict Review Publications, Inc. www.jvra.com
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