Florida Insurance Law Blog : Florida Insurance Lawyer & Attorney : Mark Nation Law Firm : Orlando, Longwood, Gainesville

Our client bought car insurance from Nationwide.  A few years later, Nationwide transferred the insurance to Allied insurance, a subsidiary of Nationwide.  Later, our client was injured in an automobile accident caused by an underinsured motorist.  Allied has stated that there is only $10,000 in UM available under the Allied policy.  Our client has $100,000 in bodily injury liability limits.  The law provides that an insurer can offer UM limits at a level lower than the bodily injury limits, if the insurer obtains a written request for the lower UM limits. 

Allied states that our client's husband signed a request for lower UM limits when he bought the Nationwide policy.  However, Florida Statute Section 627.727 says that the "insurer" must obtain a written request for the lower limits.  Nationwide is not the "insurer" for this accident, and Allied does not possess a written request that it provide lower UM limits.  Allied steadfastly relies on the Nationwide UM selection form.

I filed suit today seeking a judicial declaration that Allied is required to provide our client with $100,000 in uninsured motorists limits.  If I am successful, Allied will have to pay our fees and costs, and if I lose, I'll work for free. 

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In Saris v. State Farm Mutual Automobile Insurance Company, ____ So.3d ____ (Fla. 4th DCA 2010), Saris carried uninsured motorists insurance with State Farm.  The insured was injured by a underinsured / uninsured motorist.  The insured did not pursue a claim against the person who caused the accident, but instead filed an uninsured motorists claim against State Farm.

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On May 28, 2009, I blogged on Diaz-Hernandez v. State Farm Casualty Insurance Company, ____ So.3d ____, (May 27, 2009), wherein the 3rd DCA held that:

the provision in the UM policy, requiring the Insured to join the uninsured motorist in the lawsuit filed against the UM carrier, State Farm, is against public policy, we reverse the order dismissing the Insured's second amended complaint with prejudice, and remand for further proceedings.

State Farm moved for rehearing, and on October 14, 2009, the 3rd denied the rehearing

on the basis of the rule, well-stated by the panel, that a policy provision cannot lawfully restrict the rights of a UM insured beyond those specifically provided by statue.

In its ruling, the Court relied on the Supreme Courts ruling in Metropolitan Casualty Insurance Co. v. Tepper, 2 So.3d 209 (Fla. 2009) (which I blogged on February 24, 2009).  The Court further noted that the 11th Circuit's ruling in Bodden v. State Farm Mutual Automobile Insurance Co., 195 F. App'x 858 (11th Cir. 2006) upholding the validity of this very same clause, "could not survive the majority decision in Tepper.

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In Diaz-Hernandez v. State Farm Casualty Insurance Company, ____ So.2d ____ (May 27, 2009), the court was asked to resolve the following issue:

We must decide whether the provision in State Farm's UM policy, which requires the Insured to file suit against the known uninsured motorist and State Farm, is against the public policy of the UM statute, section 627.727, Florida Statutes (2007), and therefore, void.

In a rather straightforward opinion, the court held that:

the provision in the UM policy, requiring the Insured to join the uninsured motorist in the lawsuit filed against the UM carrier, State Farm, is against public policy, we reverse the order dismissing the Insured's second amended complaint with prejudice, and remand for further proceedings.

In its reasoning, the court noted that the State Farm policy imposed an "additional burden" on the Insured that was not required by the UM Statute.  This additional burden on the Insured required that the policy term by deemed invalid. 

This decision in in line with case law in Florida which holds that a UM insurer cannot require its insured to pursue an uninsured motorist to a judgment or settlement prior to proceeding against its insurer.  See, Liberty Mutual Insurance Co. v. Reyer, 362 So.2d 390 (Fla. 3rd DCA 1978).  See also, Metro. Cas. Ins. Co. v. Tepper, 2 So.3d 209 (Fla. 2009). 

A copy of the Diaz-Hernandez can be downloaded by clicking here

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In Metropolitan Casualty Insurance Company v. Tepper, 34 FLW S111 (Jan. 30, 2009) the Florida Supreme Court resolved a direct conflict between the 5th DCA and the 2nd DCA concerning when an uninsured motorists carrier can begin a subrogation action against the at-fault driver/owner.

In general, under Florida Statute Section 627.727, if the insured intends to seek UM benefits, the insured must notify the UM carrier whenever the insured wishes to settle a case with the at-fault driver/owner. The UM carrier then has 30 days from receipt of the notice to either agree to the settlement, in which case the UM carrier waives its rights of subrogation against the at-fault driver/owner; or the UM carrier can pay the amount that the at-fault driver/owner is offering in settlement of the claim, in which case the UM carrier preserves its rights of subrogation against the at-fault driver/owner. (The UM carrier also waives its rights of subrogation if it fails to properly respond to the insured’s request within 30 days of receipt of the notice).

The question in Tepper, was when can the UM carrier initiate the subrogation action after paying its insured the amount which was being offered by the at-fault driver/owner.

The UM Statute says that “upon final resolution of the underinsured motorist claim, the underinsured motorists insurer is entitled to seek subrogation against the underinsured motorist and the liability insurer for the amounts paid to the injured party.” Fla. Stat. § 627.727(6)(b). The 2nd DCA held that this language allowed the UM carrier to file the subrogation action as soon as the UM carrier paid its insured the amount being offered by the underinsured motorist; while the 5th DCA held that this language required that the UM carrier wait until after its insured’s UM claim against it had been finally resolved before the UM carrier could initiate the subrogation action.

The Supreme Court affirmed the 5th DCA, holding that the final resolution of the entire UM claim was a “condition precedent to the UM carrier’s entitlement to bringing a subrogation action.” Recognizing that this holding could prejudice UM carriers when the underlying UM claim was not concluded before the 4 year tort statute of limitations had expired, the Supreme Court also held that the statute of limitations for the subrogation claim does not begin to run until the entire underlying UM claim has concluded.
 

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