Can’t Just Say No: What Is Required To Decline UM Coverage?

driving_school_driving_car-1024x685If you want to decline uninsured/underinsured (“UM”) coverage, you might think it is sufficient to merely tell your insurer you do not want UM coverage. However, under Louisiana law, there are strict requirements with which you must comply in order to validly waive UM coverage. What happens if the insured does not follow those formal requirements?  

Joey Higginbotham worked as a truck driver for Dupre Logistics. He was involved in a car accident while on the job. He filed a lawsuit against the other driver and his insurer, USAgencies. He also added Dupre’s liability insurer, Zurich, and sought UM coverage under its policy. 

Zurich claimed Dupre had waived its UM coverage and moved for summary judgment. Higginbotham also filed a summary judgment motion, arguing Dupre’s supposed waiver was not valid under Louisiana law. 

The court granted Higgnbotham’s summary judgment motion, finding the supposed waivers were invalid. The court explained Zurich had inserted “N/A” on the UM forms, which deprived Dupre of the choice and made the forms unclear. Zurich filed an appeal, arguing the trial court erred in granting Higginbotham’s summary judgment motion. 

UM coverage is intended to allow accident victims to recover for their full damages even if the responsible party does not have adequate insurance coverage. There are strict requirements with which the insured must comply in order to waive UM coverage, including initialing the selected or rejected policy, filling in the applicable coverage, printing and signing the relevant names, and filling in the policy number and date. See Duncan v. U.S.A.A. Ins. Co. Before a court can consider if the insured knowingly waived its UM coverage, there must be a properly completed waiver form. See Gray v. American National Property & Casualty Co. 

Zurich claimed Dupre’s representative and told them Dupre did not want to pay for UM coverage on its trucks. It claimed it had given Dupre the applicable coverage forms, and Dupre had selected the option rejecting UM coverage. Higginbotham claimed Zurich’s UM form was invalid. 

The court agreed the original UM form did not make Dupre aware of coverage options as it stated certain coverage might not be available and pre-filled out some options as “N/A.” Although Zurich argued the court should consider the parties’ intent, the appellate court explained the parties’ intent is irrelevant if the UM form does not satisfy Louisiana law. 

Additionally, it is not sufficient for a party to merely express desire not to have UM coverage. Even if that desire is clear, there are still formal requirements that must be complied with to be a valid rejection. Therefore, the appellate court affirmed the trial court’s grant of Higginbotham’s summary judgment motion, finding Dupre had not validly waived UM coverage.

If you are considering waiving UM coverage, it is important to understand the formal legal requirements to do so. If you have been involved in an accident and there is a dispute about whether a party waived UM coverage, a good attorney can advise you on interpreting the insurance policy and applicable law. 

Additional Sources: Joey Higginbotham v. USAgencies Casualty Ins. Co. et al.

Article Written By Berniard Law Firm

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