Appeals court rules for insurer in family’s UIM coverage suit

The Indiana Court of Appeals has affirmed the denial of a family’s motion for partial summary judgment against an insurance company after a car crash they were involved in left the mother seriously and permanently injured.

In April 2018, Shannon North and her two children were in car crash that injured Shannon. At the time of the accident, Shannon and her husband, Miles North, lived with her father-in-law, James North, who had applied for and received a personal umbrella policy issued by Selective Insurance Co. of South Carolina just months before the crash.

The other driver’s automobile liability insurance paid its full limits of $50,000 to Shannon and the children, and Shannon and Miles’ automobile liability insurance paid its UM/UIM coverage limits of $300,000. James’ umbrella policy defined the term “insured” to include relatives of James who resided in James’ household.

The Norths later filed a complaint for damages against Selective and others, seeking to obtain UIM coverage for Shannon’s accident from Selective under James’ umbrella policy. But after the Norths moved for partial summary judgment and Selective filed a cross motion for summary judgment, the trial court ruled in Selective’s favor.

On appeal, the Norths asserted that the statutory requirements for rejection were not met in this case, and thus James should be afforded UM/UIM coverage under his personal umbrella policy in effect at the time of the car crash.

But the Indiana Court of Appeals disagreed, noting that the Norths’ argument ignores Subsection (h) of Indiana Code section 27-7-5-2 concerning personal umbrella policies.

“Subsection (h) states that, under a personal umbrella policy, insurers may, but are not required to, make available UM/UIM coverage. Thus, with regard to a personal umbrella policy, inclusion of UM/UIM coverage is dependent upon (1) whether UM/UIM coverage was available from the insurer and (2) whether the insured requested, and perhaps more importantly purchased, the coverage as part of the policy,” Senior Judge John Sharpnack wrote for the appellate court.

Based on the evidence provided, the appellate court concluded that the quote provided to James does not include a premium for UM/UIM coverage.

“In addition, nowhere in the application does it indicate that James requested UM/UIM coverage as part of the personal umbrella policy. In fact, the notation in James’ application states that UM/UIM coverage was ‘rejected.’ This notation was an additional signal to James that he was not applying for UM/UIM coverage. Contrary to the Norths’ arguments, the mere use of that term does not, as a matter of course, trigger or relate to the statutory rejection requirements applicable to automobile liability policies. Perhaps a better term would have been ‘not requested’ or ‘not included,’” it wrote.

The appellate court therefore ultimately concluded that James did not have UM/UIM coverage under the personal umbrella policy issued to him by Selective and in effect at the time of Shannon’s accident.

The case is Shannon M. North and Miles T. North v. Selective Insurance Company of South Carolina, 20A-PL-639.