Maine High Court Favors Auto Insurer in UIM Dispute Over Coverage Limit

Maine has one of the lowest rates of uninsured drivers in the country. That’s great news for Maine’s road users, who get cheaper uninsured motorist coverage for injuries caused by a hit-and-run/unidentified driver. Still, it doesn’t show the full picture. Many drivers have the minimum mandatory auto insurance coverage. Currently, that rate is $50,000 per person/$100,000 per crash in bodily injury liability, $25,000 in property damage and $2,000 in medical payments. This might sound like a lot, but as your Portland injury lawyers will tell you, it’s often inadequate to reimburse for total losses following a serious Maine car crash. Underinsured motorist (UIM) coverage makes up the difference – between the policy limit of the at-fault driver and your UIM limit.

Don’t assume, however, that when the time comes, the insurer will acquiesce automatically to your requested UIM compensation. Auto insurers actively seek ways to deny or reduce payments – even to their own long-time, safe driver customers. An experienced Portland UIM attorney can advocate for your right to receive full and fair compensation. We can also identify potential acts by insurers – such as vastly undervaluing a legitimate claim or refusing to tell you why they are denying a claim – that might amount to bad faith. If proven, bad faith insurance violations under the Maine Insurance Code can result not only in full crash injury compensation but also attorney fees (which would otherwise come out as a percent of your damage award), court costs AND a penalty of up to 150 percent of that amount.

Although disputes over UIM coverage can often be settled through negotiation (avoiding the time and expense of a trial), it wasn’t long ago a UIM coverage case found its way to the Maine Supreme Judicial Court. The case, Wallace v. State Farm Mutual Insurance Co., involved the question of how an “underinsured motorist” is defined. This is an important technicality of which to be mindful because the definition can differ depending on policy language and it can have a big impact on how much your insurer is required to pay you.

Our Portland car accident lawyers are aware that this was a case of three people seriously injured by a negligent trucker. Plaintiff and his two passengers (including a minor) were hurt when the driver of a construction vehicle tried unsuccessfully to pass another, lost control and smashed head-on into plaintiff. There was no dispute the construction truck driver was at-fault or that he was acting in the course and scope of employment at the time of the collision. That last bit matters because it in turn made his employer vicariously liable, meaning plaintiff could claim compensation from the commercial liability policy too.

The at-fault driver’s employer had two liability policies, one with state minimum coverage of 50/100/25 for the truck and another with a surplus insurer for $2 million in excess commercial liability coverage. However, the latter policy was deemed invalid by the insurer because the construction firm failed to keep up its end of the bargain on the $2 million policy, which was that the company had to keep a minimum primary coverage of $1 million (a big difference from the $100,000 limit the company had).

Those injured in the crash were insured by a policy from a different insurer providing up to $100,000 in UIM coverage per person and $300,000 per accident – better than the state-mandated minimum, but not enough to cover everything in a serious collision. The driver had another policy just for him with the same coverage limits.

Plaintiff settled with the trucker’s employer, receiving $1 million in excess policy limits (the two other passengers received an additional $1.1 million total) and then sought to collect on his $100,000 from his UIM carrier. His insurer would only be liable for benefits if the other driver was at fault and liability limits didn’t cover all his damages. Plaintiff argued defendant driver was underinsured because he was only insured for $100,000 when plaintiff’s damages far exceeded that. The court ruled the defendant was not an underinsured driver because of the excess liability insurance policy that – despite its argument against its own liability in the case – ended up paying the full $2 million.

The Maine Supreme Judicial Court took the case on appeal and affirmed the trial court’s ruling, looking at the aggregate amount received from defendants’ insurers, not just the limit on the primary policy

If you are the victim of a Portland car accident or need some help negotiating a fair settlement with your Maine UIM insurer, contact Peter Thompson & Associates at 1-800-804-2004 for a confidential consultation to discuss your rights.