Articles Posted in Uninsured Motorist

Plaintiffs in the recent Alabama Court of Civil Appeals case of State Farm Mutual Automobile Insurance v. Brown were seriously injured in a car accident with an at-fault driver who was underinsured, meaning he lacked enough insurance to cover all of their losses.

Fortunately, plaintiffs had an underinsured motorist (UIM) policy with defendant insurer. Plaintiffs subsequently sued the at-fault driver for negligence, and also named their own insurer as a defendant in order to recover UIM benefits.

The liability insurer of the at-fault driver subsequently offered to settle the case for $200,000, which represented the driver’s policy limits. Plaintiffs informed their own insurer of the claim. The insurer then took action under a precedent set by the Alabama Supreme Court in 1991 with Lambert v. State Farm.

An insurance company providing workers’ compensation coverage and uninsured/underinsured motorist coverage to cities (and hence, their workers) across the state pulled what many considered to be an illegal move.

As was later detailed in the case of Alabama Mutual Insurance Corp. v. City of Vernon, the city alleged in 2005 the insurer excluded city workers from collecting both workers’ compensation and UM benefits in the event workers were involved in an on-the-job accident. Workers’ compensation would thus be the only damages a worker could collect in the event of a serious crash. (They couldn’t sue the employer, due to the exclusive remedy provision, and suing the other driver who lacked insurance would likely be fruitless.)

Vernon argued this move by the insurer was a breach of contract that effectively rendered the city’s UM/UIM coverage as “illusory.” The city had contracted with the insurer to provide UM/UIM benefits to injured workers. It paid for those benefits. And yet, the city didn’t actually receive any coverage because the insurer cut out the only persons who had any realistic chance of collecting those benefits – city workers and volunteers.
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In the recent Alabama Civil Court of Appeals case of Perry v. USAA Casualty Insurance, the plaintiff has been fighting for – and likely will obtain – uninsured motorist benefits from two separate sources.

She has been fighting to have a payout tendered ever since the crash in question occurred in October 2007 in Madison County. As our Montgomery car accident attorneys know well, insurance firms will aggressively battle to keep their costs as low as humanly possible, regardless of the legitimacy of the claim.

This often means customers will be given low-ball offers or in some cases, denied coverage altogether. This is unacceptable, and the only way to ensure a fair deal is to take the case to court. As this case reveals, there are situations where that battle can drag on for years. But if your attorney is experienced and the case is strong, it can mean justice at the end of the journey.
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