These limits are important not just for that policy, but also for other secondary policies that may be applicable. Some insurance – like uninsured/ underinsured motorist coverage – will only kick in once the limits of the primary policy have been exhausted.
In the recent case of Trotter v. Harleysville Ins. Co., the question before the U.S. Court of Appeal for the Seventh Circuit was whether the trial court correctly decided that the $500,000 limit on an auto insurance policy was per accident, and not per-person. It was a difference that could have meant hundreds of thousands of more dollars for plaintiffs. However, the appeals court ultimately decided the trial court was right, denying plaintiffs additional coverage.
According to court records in the case, a woman drove through a stop sign on afternoon in July 2011. This caused a four-vehicle crash. Plaintiffs in this case were the occupants of one of those vehicles – a driver and two passengers.
At-fault driver was insured under a personal auto insurance policy that had liability limits of $250,000 per person and $500,000 per accident.
The at-fault driver’s insurer ultimately settled for the per-accident limit of $500,000. Of that, the driver received half and the remaining half was split between the two passengers.
Plaintiffs asserted this was not enough to make them whole. Therefore, each submitted claims to defendant insurer, Harleysville, with which the victim driver had an underinsured motorist policy. That policy entitled victims coverage of up to $500,000 per-accident. Underinsured motorist policy coverage provides an additional layer of protection when the at-fault driver’s insurance comes up short.
However in this case, the at-fault driver’s insurance company had paid $500,000 – which was the same limit as the UIM coverage.
Plaintiffs argued the UIM policy did not unambiguously say the $500,000 limit was per-accident, but instead could be construed to mean up to $500,000 per person. That would open the potential liability limit to $1.5 million per accident – $500,000 for each person injured (minus what they had already recovered).
When the insurer refused this demand, each filed a separate injury lawsuit against the insurer seeking to collect the remainder of their damages. The cases were consolidated and the district court decided the policy was not ambiguous and the $500,000 coverage limit is per accident – which means the plaintiffs were entitled to nothing further.
The Seventh Circuit looked closely at the language in the policy. The terms stated that the per-accident and per-person limit meant that it would pay a certain number (up to $250,000) per person and that no matter how many people were involved, it would pay no more than $500,000.
The appellate panel decided that while there might be some room to argue ambiguity in the language with regard to the per-person limits, the language pertaining to the per-accident limit was clear, and that meant nothing changed for the plaintiffs.
Ambiguity in an auto insurance policy is something that might be plainly obvious to most. That’s why we always recommend victims of serious accidents consult with an experienced car accident attorney.
Call Fort Lauderdale Injury Attorney Richard Ansara at (954) 761-4011. Serving Broward, Miami-Dade and Palm Beach counties.
Trotter v. Harleysville Ins. Co., May 10, 2016, U.S. Court of Appeals for the Seventh Circuit
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