Many of the cases we handle involve an insured having to sue their own insurance company for benefits owed. These claims are technically breach of contract claims, and they can become very complicated. Perhaps the most common type of claim we handle in this area is claims for uninsured motorist benefits. This week the Maryland Court of Special Appeals issued its opinion in Buckley v. The Brethren, and the opinion is favorable to Maryland consumers who purchase car insurance, and make a claim for uninsured motorist benefits.
In this case, the car insurance company, The Brethren Mutual Insurance Company, tried to pull a fast one on its own insured and wiggle out of paying benefits it clearly owed. You see, the handling of an uninsured motorist claim in Maryland is complicated, and generally is based on statutes including Section 19-511 of the Insurance Article of the Maryland Code.
To make a long story short, Ms. Ember Buckley was seriously injured as a passenger in a car crash in March 2007 and she incurred over $100,000.00 in medical bills. The crash was caused by Mr. Harvey Betts who owned and drove the car that Buckley was a passenger in. Mr. Betts vehicle had just $100,000.00 of liability coverage, and was covered by Geico Insurance Company. Ms. Buckley had her own car insurance policy in which she paid a premium for up to $300,000.00 in uninsured motorist benefits (also known as underinsured motorist benefits). Ms. Buckley's $300,000.00 policy was with The Brethren Mutual Insurance Company. Geico made a settlement offer of its insured's $100,000.00 policy limit in exchange for a release. As they are required to do, GEICO sent the policy limits offer in writing, but GEICO asked for a full and general release.
In the State of Maryland, uninsured motorist claims are goverened by Section 19-511 of the Insurance Article of the Maryland Code. The law allows an injured person to accept a policy limits settlement offer from a liability carrier so long as the written offer is sent to the uninsured motorist carrier by certified mail pursuant to the statute. The UM Carrier then has 60 days to consent to the acceptance of the policy limits offer (and allow for the injured person to execute a release), or to refuse to consent to the acceptance of the offer, but then to pay the amount of the offer to the injured person within 30 days of the refusal to consent. If the UM carrier consents to the acceptance of the offer (and presumably to the signing of a Release) then the UM Carrier waives its subrogation rights against the at fault party. If the Uninsured Motorist Insurer refuses to consent to the settlement, then the UM Carrier must pay the injured party the amount of the settlement, but its subrogation rights would be preserved (Because there would be no release).
In this case Ms. Buckley's lawyer sent Brethren Mutual the policy limits settlement offer by certified mail as required by the statute, and Brethren's insurance adjuster sent a letter back stating that they waived subrogation against Mr. Betts. Ms. Buckley then accepted the settlement offer from GEICO but signed a very broad general release that in and of it self, at least arguably, released the UM claim.
When Ms. Betts presented her uninsured motorist claim to The Brethren Insurance Company, Brethren's adjuster denied the claim based on the broad language in the release signed by Ms. Betts. What is disturbing is that Brethren knew that it owed uninsured motorist benefits in this case, and took a ridiculous position in order to save money. The Brethren admitted that it had consented to the settlement, but then argued that it nevertheless could lawfully deny the uninsured motorist claim because of the language in the release. This is a great example of how generally speaking insurance companies look out for their own bottom line and are not looking out for their insureds.
In any event, the Maryland Court of Special Appeals ruled in favor of Ms. Betts and against the insurance company. The Court held that so long as the Circuit Court agrees that The Brethren consented to the settlement, the uninsured motorist benefits were owed and that the only issue for trial was the amount of damages owed to Ms. Buckley. (It should be noted that Judge Eyler filed a dissenting opinion).
Practice Pointer regarding Maryland Uninsured Motorist Claims----Be sure that the letter from the UM Carrier clearly consents to the settlement and signing of a release with the liability carrier. Also, carve out the UM claim in any release signed.