Chapter 5-4 Uninsured Motorist/Underinsured Motorist (UM/UIM) Coverage Claim

• Jurisdiction: United States

5-4 Uninsured Motorist/Underinsured Motorist (UM/UIM) Coverage Claim

5-4:1 Overview

The Texas Insurance Code requires every insurer issuing automobile liability insurance policies to provide uninsured or underinsured motorist (UM/UIM) coverage in the policy or as a supplement to the policy.¹⁰² However, uninsured or underinsured motorist coverage is not required to be provided if the insured rejects the covered in writing.¹⁰³

The insured must establish the liability of an uninsured/underinsured motorist and the extent of the damages before becoming legally entitled to recover benefits under a UM/UIM policy.¹⁰⁴

5-4:1.1 Related Causes of Action

Bad Faith, Breach of Contract, Breach of Stowers Duty, DTPA, Insurance Code Violations, Late Payment of Claims, Duty to Defend

MUST READ CASES & STATUTES

Texas Insurance Code Section 1952.101 (Texas Motor Vehicle Safety Responsibility Act)
Dryden v. Dairyland Cty. Mut. Ins. Co., 633 S.W.2d 912, 914 (Tex. App.—Beaumont 1982, no pet.) (Elements 1—3)
Brainard v. Trinity Universal Ins. Co., 216 S.W.3d 809 (Tex. 2006) (An insurer has no contractual duty to pay benefits until the insured "obtains a judgment establishing the liability and underinsured status of the other motorist."¹⁰⁵ Since Brainard stands for the proposition that an insurer cannot breach the insurance contract until it refuses to pay a judgment, a number of courts have held that a breach of contract claim is no longer the proper vehicle to prove up a UM/UIM claim. See Stoyer v. State Farm Mut. Auto. Ins. Co., 2009 U.S. Dist. LEXIS 15571 at *5 (N. D. Tex. Feb. 24, 2009); Owen v. Empr's Mut. Cas. Co., 2008 U.S. Dist. LEXIS 24893 at *5 (N. D. Tex. Mar. 28, 2008). In the wake of Brainard, the proper vehicle may be a declaratory judgment action under Chapter 37 of the Texas Civil Practices and Remedies Code. See Allstate Ins. Co. v. Jordan, 503 S.W.3d 450, 456 (Tex. App.—Texarkana 2016, no pet.); Farmers Ins. Exch. v. Rodriguez, 366 S.W.3d 216, 219 (Tex. App.—Houston [14th Dist.] 2012, rev. denied)

5-4:2 Elements

(1) Insured is legally entitled to recover from the uninsured motorist;¹⁰⁶
(2) The injury sustained was caused by the accident;¹⁰⁷ and
(3) The injury arises out of the ownership, maintenance or use of such uninsured automobile.¹⁰⁸

5-4:3 Damages and Remedies

5-4:3.1 Actual Damages

Actual Damages: recovery from under-insured motorist coverage may be had only for damages sustained in amount in excess of total amount of tortfeasor's liability coverage.¹⁰⁹

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