Supreme Court rules insurance companys must make meaningful offer of UIM coverage
Insurers must make a meaningful offer of underinsured motorist coverage even when selling policies to sophisticated corporations that have repeatedly rejected the optional coverage, the Supreme Court has ruled in response to certified questions from federal court.
In an August 22 decision, the justices said that Old Republic Insurance Company was required to make a meaningful offer of UIM coverage to Penske Truck Leasing when it sold the company a “fronting policy” – a contract where the deductible matches the liability limits. The ruling, discussed in the August 29, 2005 edition of South Carolina Lawyers Weekly, sends the case back for a ruling on whether a meaningful offer was made.
I decision that a meaningful offer was not made could open the door to a $1 million in UIM coverage for the estate of a trucker killed in a 2002 wreck. “It’s a big case,” said the plaintiff’s attorney Dick Harpootlian of Columbia. “It’s very significant in the sense that the trucking industry has developed this fronting policy scam, I would call it, to get the benefits of being self-insured without really being self-insured,” Harpootlian told Lawyers Weekly.
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