The judges of the Third Circuit Court of Appeals ruled that the insured’s waiver of higher UM/UIM limits on a policy still applies after the insurer transfers that policy to its subsidiary. The case is Selective Ins. Co. of Am. v. Novitsky, 796 Fed. Appx. 100 (3rd Cir. 2020). Please note that this case is not a precedential opinion under Third Circuit Internal Operating Procedure Rule 5.7.and is not a binding precedent on the court.

The Policy Transfer

Village Auto Sales purchased an auto policy from Selective Insurance Company of South Carolina (Selective of South Carolina). The president of Village Auto, Robyn Novitsky, signed a UM/UIM form requesting only $35,000 in UM/UIM coverage, rather than the $1 million Selective of South Carolina was obligated to offer. Mrs. Novitsky also signed a notice stating she understood the potential consequences of a lower UM/UIM limit and acknowledged that her election of lower UM/UIM limits would not change unless she requested otherwise.