V. Coverage for Hit-and-run Accidents

• Library: The Law of Automobile Insurance in SC (SCBar) (2015 Ed.)

V. Coverage for Hit-and-Run Accidents

A. General

Since their inception, uninsured motorist statutes have provided coverage for accidents with hit-and-run drivers. This has been accomplished by including in the definition of "uninsured motorist" that "a motor vehicle shall be deemed to be uninsured if the owner or operator is unknown."¹³¹ Section 38-77-170 was amended to include three requirements for recovery where the uninsured motorist is unknown:

(1) the insured or someone in his behalf has reported the accident to some appropriate police authority within a reasonable time, under all the circumstances, after its occurrence; [and unless]
(2) the injury or damage was caused by physical contact with the unknown vehicle, or the accident must have been witnessed by someone other than the owner or operator of the insured vehicle;¹³² provided however, the witness must sign an affidavit attesting to the truth of the facts of the accident contained in the affidavit;¹³³ [and]
(3) the insured was not negligent in failing to determine the identity of the other vehicle and the driver of the other vehicle at the time of the accident.

Section 38-77-170 also requires the following statement must be prominently displayed on the face of the affidavit provided in subsection (2) above:

A FALSE STATEMENT CONCERNING THE FACTS CONTAINED IN THIS AFFIDAVIT MAY SUBJECT THE PERSON MAKING THE FALSE STATEMENT TO CRIMINAL PENALTIES AS PROVIDED BY LAW.¹³⁴

The bracketed language quoted above was removed during the recodification process in 1987. Nevertheless, the meaning of the statute remains unchanged, and all three conditions following the bracketed "[and unless]" must be met before recovery may be had under the UM policy.¹³⁵ As detailed below, these requirements have been subject to construction by the courts. In addition, the Act provides that an action may be instituted against the unknown driver as "John Doe," and it authorizes the joinder in that action of a joint tortfeasor or other person causing such injury or damage.¹³⁶

B. Reporting Requirement

Section 38-77-170(1) requires the claimant or someone on his behalf to report the accident with the unknown motorist to some appropriate police authority within a reasonable time, considering all the circumstances, after its occurrence. "The reporting requirement may inflict a hardship upon the victim of a hit-and-run accident who has paid for coverage, but is unaware of the need to report the accident, however, the legislature has determined some prompt reporting is necessary to facilitate investigation and to adequately protect the insurer."¹³⁷

"The present statute imposes no definitive burden of an immediate notice, nor does it specify who must be notified. The current statute is adaptable to the exigencies of each claim. It substitutes an elastic requirement of notice within a 'reasonable time' to 'some appropriate police authority.'"¹³⁸

The claimant's attorney in Bolton v. Doe¹³⁹ reported the accident by mailing a copy of the Uniform Traffic Collision Report to the Safety Responsibility Section of the Highway Department, without contacting any other police authority. The uninsured motorist insurer argued that the Highway Department was not an "appropriate police authority" because it had no investigative authority and that the claimant should have notified the police, the Sheriff's Department, or the Highway Patrol. Noting that "[t]he statute only requires reporting of the accident to 'some' appropriate police authority, not necessarily the most appropriate police authority," the court rejected the argument and held that "the statute was complied with to the same end as though reported to the local police."¹⁴⁰

In Morehead v. Doe¹⁴¹ the court of appeals held that a delay of 259 days was an unreasonable delay. The accident occurred on July 21, 1989. The insured (who was an insurance agent) completed a loss notice form for UM coverage. On April 2, 1990, the UM carrier requested the insured to provide it with a copy of the "accident report." The insured then notified the Highway Patrol some four days later. The court of appeals rejected the insured's arguments that he had substantially complied with the reporting requirement by promptly reporting the accident to the insurance carrier, and that the insurance company had the same information as was subsequently provided to the police. The court also rejected the argument that the UM insurer was estopped from relying on the insured's noncompliance because it never advised the insured of the need to file an accident report, or that his failure to do so would serve as a basis for denying coverage.

C. "Physical Contact" Requirement

1. Law Prior to Passage of Act 166 in 1987

Prior to the passage of Act 166 in 1987, damages recoverable which proximately resulted from the negligence of an unknown motorist were limited to those where "[t]he injury or damage was caused by physical contact with the unknown vehicle."¹⁴² "The statute ma[de] proof of physical contact a condition precedent in every case for the recovery of damages caused by an unknown driver and vehicle. There [were] no exceptions."¹⁴³ The rationale for the physical contact requirement was stated in Coker v. Nationwide Mutual Insurance Co.¹⁴⁴

This provision of the statute [requiring physical contact] was undoubtedly adopted to curb fraud, collusion and other abuses arising from the assertion of claims that phantom vehicles had caused accidents. "The assertion of a hit and run accident is a proposition easy to allege and difficult to disprove. Absent protective legislation, it opens the door to abuse including fraud and collusion. Who is to say, for example, that a driver who falls asleep at the wheel of his car and runs off the road was not in fact caused to run off the road by a hit[-]and[-]run driver, or that two cars involved in an accident were not caused to collide by a third hit[-]and[-]run car, if that is in fact what the drivers allege. The problem, however, virtually disappears with the requirement of 'physical contact.' Proof that a hit[-]and[-] run vehicle did in fact exist is then clearly available for, as 'physical contact' almost invariably produces visible evidence of impact, the possibility of a 'phantom' hit[-]and[-]run driver becomes minimal."¹⁴⁵

The constitutionality of the requirement was upheld in Sapp v. State Farm Mutual Automobile Insurance Co.¹⁴⁶ While the purpose of the rule was to eliminate fraudulent claims, the mere fact that the uninsured motorist insurer admits the presence of an unknown vehicle, which contributed to the claimant's damages, or — prior to the passage of Act 166 — that there were adequate impartial witnesses to the same, did not eliminate the requirement.¹⁴⁷ "Nowhere did the statute state or imply that the physical contact requirement may be met by proof that there was in fact an unknown driver and vehicle nor by proof that the unknown vehicle caused the accident."¹⁴⁸

Accordingly, recovery was denied on the grounds that physical contact with the unknown vehicle was not present when there was a collision between the insured's vehicle and a vehicle with which the unknown motorist was racing;¹⁴⁹ when the unknown vehicle caused another vehicle to swerve and collide with the insured;¹⁵⁰ when a motorcycle came into contact with a slick chemical substance spilled on the highway by an unknown motor vehicle;¹⁵¹ and when the claimant was injured when a wheel bearing thrown off of an unknown passing truck broke through the front windshield and hit her in the chest...