Nothing is more tragic than the loss of life. However, that loss can be tempered somewhat if insurance is in place that provides some financial compensation. While money cannot substitute for the loss of love and companionship that a spouse gives, it can at least provide some help with the bills and, therefore, one less thing to worry about when grieving. But what happens when the insurance company refuses to pay your claim? The following lawsuit in Tangipahoa, Louisiana, discusses these issues in the context of a car accident, uninsured motorist coverage, and the refusal of State Farm to pay the claim.
As Jerry and his wife Lois Draayer drove down Interstate 55 in Pike County, Mississippi, a motorist struck the couple. Unfortunately, that driver had both crossed the median and lacked sufficient insurance. The underinsured motorist was Russel Allen, and Lois Draayer tragically died from the collision.
Lois’s family brought a lawsuit against Allen, his automobile liability insurer (Progressive Insurance Company), and named their insurer, State Farm, which they claimed provided Lois with UM coverage. The Draayers added State Farm to the suit to ensure financial recovery for Lois’s death.
State Farm successfully asked the trial court to dismiss itself from the case because it claimed it did not provide UM coverage to Lois since she had waived UM coverage by signing a form in 2009. The trial court agreed with State Farm’s position. The Draayers appealed, asserting there were disputed facts concerning the rejection of the UM form. For there to be a lawful and valid rejection, Lois must have knowingly made an informed and meaningful rejection of the coverage. La. R.S. 22:1295(1)(a)(ii) If an insurer has a form with the insured’s signature of waiver, then the general rule is that it creates a rebuttable presumption. Duncan v. U.S.A.A. Insurance Company, Thus, the “ball was in Draayer’s court” to convince the court otherwise.
The facts showed State Farm forced Lois to resign the 2009 UM waiver. Additionally, it was proven Lois only completed 2 of the six steps of the 2009 form. Lois signed her name and initials while the insurance agent did the rest. Thus, since State Farm did not comply with the statute, it owed the family coverage. The appeals court agreed with the Draayers and welcomed State Farm back into the picture. However, State Farm sought another shot at removing themselves from the lawsuit. Hence, another bite at the apple.
As the trial court reinstated State Farm, it sought a motion for summary judgment, arguing that Lois signed a valid UM selection form in 2004. The trial court agreed and dismissed State Farm from the case. However, Draayer appealed to bring State Farm back into the lawsuit.
In the appeals court, State Farm relied heavily on case law that suggested a subsequent invalid UM form does not supersede the validity of prior forms. Hughes v. Zurich American Ins. Co. The appeals court reasoned State Farm previously sought to enforce the 2009 UM selection form on the basis that it had legal consequences, and those legal consequences now bind it. Those consequences included the court’s decision that there were issues of fact as to its validity. The appeals court held State Farm is not entitled to ” a second bite at the apple” by resurrecting the earlier 2004 UM form when a subsequent UM selection form was executed during the policy period. Therefore, once again, State Farm was required to provide UM coverage to the Draayers.
Regardless of the outcome of this case, it stresses the importance of knowing your rights in insurance disputes. Insurance companies want to avoid paying hefty sums out-of-pocket and will find any technicality they can to ensure they save some cash. Therefore, it is up to you to be meticulous before carelessly waiving rights. Before you sign and “initial” access to compensation and protection, ensure you understand the potential implications of such a waiver.
Additional Sources: Draayer, et al., v. State Farm Fire and Casualty, et al.
Written by Berniard Law Firm
Additional Berniard Law Firm Articles on UM insurance disputes: Considering Uninsured motorist coverage in Louisiana, Be Careful What You Sign