When you signed up for automobile insurance, you might have noticed that many states now require automobile insurance agencies to include some sort of uninsured motorist ("UM") clause in your insurance agreement. Oftentimes, the only way to get out of including this in your coverage, and therefore having to pay a higher premium, is by explicitly rejecting this additional coverage. How exactly do you reject this additional coverage, though? While this might seem like an easy question, most states, including the state of Louisiana, require very specific requirements to be met in order for rejection of UM coverage to be proper.
In the State of Louisiana, that is exactly the case: In order to get out of paying a higher premium for this uninsured motorist coverage, the insured has to explicitly reject that coverage. And the state of Louisiana has many rules with regard to how to properly complete this task.
In order for an uninsured motorist rejection to be considered proper, Louisiana courts have found six tasks that must be completed by the insured. In Duncan v. U.S.A.A Ins. Co., 06-0363 (La. 11/29/06), 950 So. 2d 544, the court outlines these six tasks as follows:
1) initialing the selection or rejection of coverage chosen; 2) if limits lower than the policy limits are chosen (available in options 2 and 4), then filling in the amount of coverage selected for each person and each accident; 3) printing the name of the named insured or legal representative; 4) signing the name of the named insured or legal representative; 5) filling in the policy number; and 6) filling in the date.
While the Court in Duncan did not explicitly deal with the timing of these tasks, a couple years later, the Court in Gray v. American National Propery & Cas. Co., 07-1670 (La. 2/26/08), 977 So. 2d 839, discussed the requisite timing in which the above tasks need to be completed. According to the Court in Gray, all six of these tasks have to be completed before the UM selection form is signed by the insured. The Court also went on to say that the completion of these tasks has to be done in a manner showing that the insured's signature signifies that he or she agrees with all of the information that is contained in the insurance form. While the Court said that the tasks have to be completed before the UM selection form is signed by the insured, that was not the most important part of the Court's findings. Rather, the most important part of the Court's holding was that the insured's signature needs to signify agreement with all that is contained in the form.
In the recent case decided by the Louisiana Supreme Court, Edward Morrison v. U.S.A.A Casualty Ins. Co., No. 2012-CC-2334, the Court really focused on the fact that the most important part of the timing of the UM selection form is that the insured's signature is affirming agreement to all the clauses contained therein. This case primarily deals with task #1 listed above which requires that an individual properly initial the selection or rejection of coverage chosen in order for UM rejection to be considered proper.
In this case, the insured's representative clearly meant to reject UM coverage but accidentally did not initial the line that stated such in the agreement form. When the insurer received the form, he or she noticed that the form was incomplete and sent it back to the insured's representative. At that time, the representative initialed the proper line rejecting UM coverage and returned the form to the insurer. This clearly showed that the insured agreed with all of the clauses and various information contained in the form. Furthermore, all of this was completed before the relevant accident, so the court held the UM rejection valid.