The When and How of Waiving Uninsured Motorist Coverage

Uninsured motorist (UM) coverage protects drivers from individuals not carrying sufficient insurance. The importance of such coverage makes waiving it a somewhat complicated procedure, designed to make sure the driver truly does not want it. A case in Abbeville, Louisiana, illustrates the complexities of when corporations waive UM coverage on company automobiles.

Plaintiff James Bergeron sued to recover damages after being rearended in the vehicle provided by his employer, Murphy Oil. All defendants were dismissed from the suit except Liberty Mutual, which contended it didn’t include uninsured motorist coverage in the policy it issued to Murphy Oil.

In Louisiana, uninsured motorist coverage is provided by a specific statute, La.R.S. 22:1295. Court decisions have recognized the importance of UM insurance as a matter of public policy, to the extent that the coverage is implied as an amendment to any automobile liability policy (even policies not expressly providing for it).

An insurer is required to prove that the insured either explicitly rejected UM coverage or opted for a lower policy limit. Further, a specific commissioner of insurance form, with several requirements for proper execution, must be used to waive UM coverage.

In this case, the issue was whether the employee who signed this UM rejection form on behalf of Murphy Oil had the authority to do so. Specifically, plaintiff contends there was no evidence that the employee had express written authority to sign the form.

The trial court granted Liberty Mutual’s summary judgment motion dismissing the plaintiff’s claims. In support of its motion, Liberty Mutual offered two affidavits attesting to the employee’s authority to accept or reject UM coverage.

Plaintiff brought up a court decision in which an insured’s mother was found not to be acting as a “legal representative” of the insured, because there was nothing in writing evidencing such authority. But the appellate court distinguished the decision from the facts of this case by pointing out that the insured is a corporation. Officers, employees, and agents act on behalf of corporations, and the employee who signed the UM rejection form acted on behalf of Murphy Oil.

The key issue, then, is “whether the person who signed the form was authorized by the corporation to reject UM coverage.” The individual who signed the waiver in this case was found to be acting in his capacity as a Murphy Oil employee.

Uninsured motorist insurance provides critical protection to injured drivers when the party at fault is not sufficiently covered. If your insurance company is refusing to cover your automobile accident, speak with an attorney at Berniard Law Firm today.

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