While the general public has come to expect most dealings with an insurance company to have at least some element of delay and frustration, most people are very unpleasantly surprised to discover that situations in which underinsured or uninsured motorist insurance is involved are often particularly contentious.
Unlike homeowner’s insurance or even property damage to one’s own automobile, the value of an uninsured or underinsured motorist claim can be rather subjective and, hence, may involve a great deal more negotiation that the insured individual expected.
In fact, it is not unusual for uninsured or underinsured motorist coverage disputes to be subject to litigation in the court system, with the insurance company effectively “standing in the shoes” of the uninsured or underinsured motorist who caused the accident and asserting the various defenses that person would be entitled to use.
Facts of the Case
In a recent case decided by a federal district court in North Carolina, the plaintiff was a woman who was seriously injured in a motor vehicle accident caused by another driver. The accident took place in January 2013. After settling her negligence claim against the at-fault driver for the $30,000 limits of his liability insurance policy in July 2014, the plaintiff attempted to collect additional monies from her own underinsured motorist (UIM) insurance company.
The insurance company refused to make a payout on the plaintiff’s UIM claim, and she filed suit in state court in October 2014. The named defendant was the at-fault driver, but the UIM insurance company defended the suit as an unnamed party. The state court referred the matter to arbitration, and the plaintiff was awarded $90,000 plus interest and costs. The state court entered a judgment for the plaintiff in the amount of $60,000 ($90,000 minus the $30,000 previously paid by the at-fault driver’s liability carrier), and the UIM insurance company paid that amount to the plaintiff sometime in 2016.
Thereafter, the plaintiff filed suit against the UIM insurance company, alleging that it had engaged in unfair and deceptive trade practices. The insurance company filed a motion to dismiss the plaintiff’s suit for failure to state a claim.
Decision of the Court
The United States District Court for the Middle District of North Carolina granted the UIM insurance company’s motion to dismiss. According to the court, the plaintiff did not allege the type of aggravated conduct or bad faith required to maintain her claim.
The UIM carrier was not required to make an offer of settlement prior to the arbitration (or even after the arbitration). Instead, the insurance company’s obligation to compensate the plaintiff did not arise until such time as she was “legally entitled to recover” compensation from the underinsured driver. In so holding, the court observed that “determining the value of an insured’s claim under an insurance policy [is] not an exact science.”
The court also sided with the insurance company on the issue of whether the plaintiff had failed to allege damages proximately caused by its alleged unfair or deceptive trade practices, noting that the insurance company had, previous to the suit, apparently paid not only the compensatory damages stated in the judgment entered by the state court following the arbitration award but also prejudgment interest and costs.
Get Legal Advice About a Raleigh Accident Case
If you have been hurt in an automobile accident that was not your fault, you need to talk to an attorney as soon as possible. Many issues can arise in such cases that can seriously limit or even prevent a fair recovery for your injuries. To schedule an appointment with a knowledgeable Raleigh car accident attorney, call Nagle & Associates for a free, confidential case evaluation today. We serve clients throughout the state of North Carolina, including in Durham, Chapel Hill, Wake Forest, Cary, and Garner.
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