Del. Supreme Court weighs if insurers may deny UIM benefits

The state's high court is considering whether a car crash victim is eligible for multiple types of insurance benefits.

Delaware Supreme Court chamber in Dover, Delaware. (Photo: Nagel Photography/Shutterstock.com)

The Delaware Supreme Court recently considered whether passengers injured in a car crash are eligible for multiple types of insurance benefits.

USAA General Indemnity Co. appealed a Superior Court decision made last year which determined state statutes didn’t bar Harry Brown, who was injured in a car accident, from receiving underinsured motorist benefits after being awarded bodily injury liability compensation from the same driver’s insurance policy, arguing the original decision didn’t correctly analyze the issue.

The Superior Court’s decision

Harry Brown was injured in a 2016 crash while a passenger in a motor vehicle, the driver of which, Taleah Everett, was determined to be solely at fault for the collision. Brown was paid the maximum amount allowed in bodily injury liability coverage as specified in Everett’s USAA policy, but the costs associated with his injuries exceeded that amount. Brown then filed his lawsuit in an attempt to get underinsured motorist benefits from Everett’s policy.

Superior Court Judge Abigail M. LeGrow determined in an opinion last year that Section 3902 of Delaware’s insurance code had been found to be unambiguous on multiple occasions, with a subsection defining an underinsured motor vehicle as one for which the limits of bodily injury coverage are lower than the damages for injuries sustained. Using that definition as applied in previous cases, LeGrow determined Brown’s receipt of bodily injury payments was not reason enough to exclude him from being eligible for underinsured motorist benefits, as well, with the law defining an underinsured vehicle as being “relative to the victim’s injuries.”

USAA maintained that under Everett’s insurance policy, it wasn’t required to pay Brown underinsured motorist benefits in addition to the amount he received from bodily injury liability coverage and argued that allowing the occupant of a single-vehicle crash to collect in both areas would dissuade Delaware drivers from paying for underinsured motorist coverage at all. LeGrow ruled that it was inconsistent with the plain language of Section 3902.

“This case is very simple,” Marin said, arguing that state code defines an uninsured vehicle as being one in which policies in place at the time of a crash cover less than the damages sustained by the injured person. “That is clear. That is unambiguous. There is no legislative history to that. The language is clear. You don’t need to look beyond the language.”

The arguments before the Supreme Court

Louis J. Rizzo, representing USAA, argued on Aug. 12th that the Superior Court overlooked the issue of whether underinsured motorist coverage is required coverage or voluntary supplemental coverage under Delaware law.

“It’s mandatory in the sense that the insurance company has no choice,” said Brown’s attorney, Bayard Marin, before the Supreme Court. “They have to offer this insurance coverage to the insured. The insured has the option to reject it, but the insurance company has no say in this.”

When Chief Justice Collins J. Seitz Jr. asked Marin why he isolated that particular subsection of the law when the preceding subsection seemed to indicate a scenario involving two vehicles, Marin said the subsection he noted was key because it defined “underinsured.” Also, the insurance policy defined a passenger as covered, with any exclusions to that coverage needing to be specifically authorized by statute.

“This statute does not authorize any exclusions, so, as ‘My Cousin Vinny’ would’ve said, don’t pay attention to all of that. It’s subterfuge. Well, he would’ve said it more colorfully,” Marin said. “The point is that all of that talk about exclusions, all the talk about any kind of diminishment of the amount, is simply wrong because the statute clearly says what it says, and I think it needs to be read because this is the part that becomes applicable as soon as the contract becomes clear.”

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