Bringing the Uninsured and Underinsured Motorist Case

• Publication year: 1997
• Pages: 111

26 Colo.Law. 111 Colorado Lawyer 1997.

1997, November, Pg. 111. Bringing the Uninsured and Underinsured Motorist Case

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111

Vol.26, No. 11, Pg.111

The Colorado Lawyer
November 1997
Vol. 26, No. 11 [Page 111]

Specialty Law Columns
Young Lawyers Column
Bringing the Uninsured and Underinsured Motorist Case
by Jim Christoph

For more than two decades, Colorado has required owners of motor vehicles in Colorado to purchase minimum bodily injury liability limits under the Colorado Auto Accident Reparations Act.1 Under this Act, every insurance policy covering a motor vehicle must provide at least $25,000 per person and $50,000 per accident of bodily injury liability coverage.2 Unfortunately, the presence of uninsured drivers on Colorado highways is not uncommon. Further, these mandatory $25,000/ $50,000 liability limits have remained at this level since 1983. Because these limits have not kept up with inflation they are providing substantially less coverage for the losses caused by negligent drivers

The legislature has addressed these problems over the years In 1965, legislation was passed that required uninsured motorist coverage ("UM") to be offered to policy holders.3 In 1983, the legislature addressed the problem of insufficient minimum coverages by requiring auto insurance carriers to offer optional underinsured motorist coverage ("UIM").4 UIM provides additional coverage for insureds beyond the mandatory minimum $25,000/ $50,000 liability limits. For example, if an insured who has purchased a policy with UIM of $100,000 is seriously injured by a negligent tortfeasor with only $25,000 of liability coverage, the insured may claim up to an additional $75,000 from his or her own policy. Since 1989, UM/UIM coverage for property damage to vehicles also must be offered as an option to insureds who do not have their own collision coverage.5

This article is intended as an overview of some of the more important issues to be considered with UM/UIM claims. For a more detailed review of issues related to the scope of coverages and benefits provided under UM/UIM, there are several treatises and articles that should be helpful to the practitioner.6 Applicable case law in this evolving area also should be carefully consulted.

Available Coverages

Auto insurance carriers are required to offer UM/UIM coverage that matches the bodily injury liability limits of the insured's policy up to a maximum of $100,000 per person and $300,000 per occurrence.7 Insurance companies often offer UM/ UIM limits that exceed these mandatory maximums. Although the auto insurance carrier is required to offer UM/UIM coverage, the insured may reject this coverage in writing.8

There are many situations where UM/ UIM coverage may be triggered. These include insureds who are pedestrians; which includes bicycle riders injured by an uninsured or underinsured vehicle;9 victims of hit-and-run and miss-and-run collisions;10 persons who are the victims of intentional torts arising out of the use and operation of a motor vehicle;11 an insured who is struck by his or her own car in an effort to stop an uninsured thief driver;12 persons injured in motorcycle accidents, depending on the language of the policy;13 and when an insurance company becomes insolvent.14 The UM/UIM statute no longer applies to vehicle rental agreements or motor vehicle rental companies.15

Another coverage question involves "stacking." Stacking is the adding up of benefits from two or more UM/UIM policies. Virtually all insurance policies contain anti-stacking provisions to prohibit insureds from stacking multiple policies issued by the same insurer or one of its affiliates. A single policy covering multiple vehicles also will generally contain anti-stacking language. These provisions are enforceable and do not violate public policy.16 They have, however, been strictly construed against the insurer when determined to be ambiguous.17

Anti-stacking provisions cannot prohibit the stacking of a policy issued to an insured with another policy not issued for the benefit of that insured, regardless of whether the same insurance company sold both policies.18 For example, if the insured was a passenger in a friend's car and was negligently injured by an uninsured driver, the friend's and the passenger's own UM coverages may be stacked Whether the polices to be stacked are looked to as primary versus excess...