UM Coverage and Requirements for Waiving That Coverage
January 19, 2015
The named insured brought an action against his auto insurer to recover uninsured motorist (UM) benefits. This case is Boarman v. Grange Indem. Ins. Co., 437 S.W.3d 748 (Ky. App. 2014).
Boarman was involved in an auto accident when another driver ran a red light and crashed into Boarman's Jeep Grand Cherokee. The other driver was uninsured. Boarman filed for UM benefits from his insurer, Grange Indemnity, but the insurer refused to pay any UM benefits on the grounds that Boarman's wife had rejected such coverage in writing. Boarman sued the insurer and the trial court ruled in favor of the insurer. This appeal followed.
The insured argued that the trial court misinterpreted the Kentucky statute by holding that Boarman did not have to personally reject his right to statutory UM benefits; his wife, by rejecting UM coverage for herself, also rejected the UM coverage for Boarman since she was acting as his agent.
The Court of Appeals of Kentucky noted that the statute requiring that UM coverage be included in auto insurance policies in the state had a provision stating that “the named insured shall have the right to reject in writing such coverage.” In this instance, Boarman's wife did sign a waiver of UM coverage for herself as the applicant for the auto insurance. However, she did not sign the co-applicant spot for Boarman; that was left unsigned. The insurer argued, and the trial court agreed, that the wife waived her coverage and her husband's coverage with her signature.
The appeals court said that Kentucky courts have not addressed the issue as to whether each named insured must personally reject UM benefits or if the named insured purchasing the auto insurance policy may make the decision for all parties covered by the policy. The court then offered its opinion that the Kentucky statute was unambiguous. The court said that the statute states that UM coverage is a part of every insurance policy unless “the” named insured rejects the coverage in writing. The court noted that the General Assembly could very easily have used different language if it intended to require anything less than a signed waiver by each individual named insured on the policy. Based on the language of the statute, the court ruled that Boarman's wife could not waive his UM benefits with her signature.
The court also disagreed with the trial court on the question of whether the wife acted on behalf of Boarman in waiving UM coverage. Two named insureds were listed on the auto policy and Grange presented a waiver that required a signature for the applicant and the co-applicant. The wife signed her own name as the applicant; she did not sign on behalf of her husband as she left the co-applicant section blank. There was nothing in the record to suggest that Boarman authorized his wife to waive UM coverage on his behalf.
The ruling of the trial court was reversed and remanded.
Editor's Note: The Court of Appeals of Kentucky rules that the state law requiring auto insurance policies to provide UM coverage, unless the named insured waives such coverage, is unambiguous in that “the” named insured must waive the UM coverage. No one named insured can waive the coverage for any other named insured.