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CHANGES TO POLICIES AND OTHER IMPORTANT UNINSURED AND UNDERINSURED INSURANCE CLAUSES PowerPoint will be posted on: www.schmidtkramer.com Scott B. Cooper SCHMIDT KRAMER.COM 209 State Street Harrisburg, PA 17101 (717) 232-6300 firstname.lastname@example.org TRADITIONAL UNINSURED/ UNDERINSURED ARBITRATION CLAUSES POST KOKEN CLAUSES NEW USAA ENDORSEMENT “Arbitration” “The Arbitration provisions for Uninsured Motorist Coverage and Underinsured Motorist Coverage are deleted in its entirety.” New Allstate Language “If the insured person and we do not agree on that person’s right to receive damages or on the amount, then upon mutual consent, the disagreement will be settled by arbitration….If the insured person and we do not agree to arbitrate, then the disagreement will be resolved in a court of competent jurisdiction.” New State Farm Language The insured and we must agree to the answers to the following two questions: (1) is the insured legally entitled…(2) If the insured and we agree that the answer to (1) is yes, then what is the amount of compensatory damages that the insured is legally entitled to recover…. WHAT IF NO AGREEMENT? State Farm (cont’d) If there is not agreement on the answer to either then the insured shall: 1. file a lawsuit, 2.consent to a jury trial if requested by us, 3. agree that we may contest both liability and damages and 4. secure a judgment in that action. NEW CHUBB LANGUAGE • “that the matter may be arbitrated.” • “Should either party demand arbitration, each party will select an arbitrator….” New AMICA Language Old Language: Either party may make a written demand for arbitration. Post Koken Language: Both parties must agree to arbitration. ISO Personal UM & UIM Arbitration Clause AUTHORIZATIONS AND MEDICAL PAYMENTS State Farm’s Authorization Includes medical, psychological, psychiatric, chiropractic, osteopathic… Can get EDR information or anything else.. The company can basically disclose the information to anyone it wants for “their review and professional opinion.” Valid for duration of claim. Liberty Mutual’s HMO for PIP! Insured eligible for “Preferred Provider Network”. You get a discount off of treatment! Example: If you have $1,000 of medical coverage under your policy and a non-PPN provider provides medical treatment that totals $1,000 you policies medical benefit is exhausted BUT using the PPN the provider contracts for the 20% discount and they pay $800 so you still have an additional $200 on your benefits. THE “INSUREDS” DEMAND DECIDES IF ARBITRATION APPLIES CLAUSE Amount of Damages Determines Arbitration “If the amount of damages the „insured‟ demands is $--------- or less, both parties will select a single arbitrator…..If the amount of damages the „insured‟ demands is more than $-------, each party will select an arbitrator.” Connecticut is $40,000 Powers of Arbitrators in Policy Allstate Language • No arbitrator shall have the authority to award punitive damages or attorney’s fees Who pays Fees? “All arbitration expenses and fees, not including counsel or adjuster fees, will be paid as determined by the arbitrators.” Alaska (1997) Each party will pay the expenses it incurs and bear the expenses of the third arbitrator equally, unless the arbitration costs are awarded to the prevailing party by the arbitrators.” New Mexico (1997) WHERE DOES ARBITRATION TAKE PLACE? AMICA LANGUAGE Unless both parties agree otherwise, arbitration will take place in the county in which the insured lives. ALLSTATE “Unless you and we agree otherwise, arbitration will take place in the county in which your address shown on the Policy Declarations is located.” New Exclusion/Limitation Language Chubb’s “Collector” Language Collector Vehicle Usage: We do not cover any person for damages arising out of the ownership, maintenance, or use of a collector vehicle when it is: Used for any person‟s primary or backup transportation or errands, driven to work or school, driven by any person under the age of 25 years, used as a shared-expenses car pool, used in any business or occupation, or used to participate in any road rally, gymkhana, sports event or timed event of any kind. State Farm Filings “relative” has been changed to “resident relative” Due to Hoffman v. Troncelliti, now a person who had limited tort is treated as full tort if injured while occupying a vehicle owned by a resident relative to which the full tort alternative applies. State Farm (cont’d) Under Liability added a “household” exclusion to exclude injury to family members caused by other family members. UM covered now will apply if insured not hit the insured or the vehicle the insured is occupying if the facts of the accident can be supported by “disinterested witnesses”. Changed definition of “insured” to include all named insureds, rather than first named insureds. Passengers and resident relative are no longer covered while in a non-owned vehicle driven by an insured. Allstate New Language Now has language which says “bodily injury to anyone while in, on, getting into or out of or when struck by a motor vehicle owned or leased by you or a resident relative which is not insured for Uninsured Motorist Coverage under this policy.” Now also has same change for non-owned regular use of you or a resident relative. DUTIES AND OBLIGATIONS OF INSURED State Farm Language If the company requires, persons answering questions under oath may be accompanied only by their legal representative. Nationwide The insured must: Submit to oral examination under oath as often as we require with good reason. Be examined by doctors, including doctors examining the insured for rehabilitation purposes…chosen by us as often as we require with good reason. STATUTE OF LIMITATIONS New UM SOL Commercial Policy Clause Any legal action against us under this coverage form must be brought within 4 years after the date of the “accident.” However, this paragraph does not apply to an “insured” if, within 4 years after the date of the “accident”, we or the “insured” have made a written demand for arbitration in accordance with the provisions of this endorsement Allstate General Provisions Change “No one may bring an action against us unless:…..b) the action is commended within one year of the date the cause of action accrues.” Allstate New Language No one may pursue arbitration under Part 3 – Uninsured Motorist Insurance……unless the demand for arbitration is made within four years after the date of the accident. New UIM Commercial SOL Clause b. Any legal action against us under this coverage form must be brought within 4 years after the date of the “accident.” c. Paragraph 2b of this condition does not apply to an “insured” if, within 4 years after the date of the “accident”, (1) we or the “insured” have made a written demand for arbitration in accordance with the provisions of this endorsement or, (2)The “insured” has filed an action for “bodily injury” against the owner or operator of the “underinsured motor vehicle” and such action is: (a) Filed in a court of competent jurisdiction; and (b) not barred by the applicable state statute of limitations. State Farm Policy Filing Legal action for UM and UIM coverage must be brought within two years after the date of the accident, and only after filing a lawsuit in accordance with the Deciding Fault and Amount Provision. Also there is a choice of law provision that the law of Pennsylvania controls if there is a disagreement as to the interpretation and application of the policy, but Illinois applies as to interpretation and application of Mutual Conditions or the Participating Policy provision, whichever one applies to the car policy. The UIM SOL Kicker In the event that the four year time limitation identified in this condition does not apply, the applicable state statute of limitations will govern legal action against us under this coverage form. Apply Rosenthal Third Circuit Decision from April 20, 2007 Power to Enter Amount of Award In Excess of Limits • “The arbitrators shall have no authority to award an amount in excess of the limit of liability.” Can you Assign? NATIONWIDE No interest in this coverage can be transferred without our written consent. However, if the policyholder dies, this coverage will continues in force for the rest of the policy period. UIM – Transfer of Rights If we make any payments…involving an UIM vehicle and the “insured” recovers from another party in a separate claim or suit, the insured shall hold the proceeds in trust for us and pay us back the amount we have paid less reasonable attorneys fees, costs and expenses…. Our rights under this provision do not apply…if we: a. Have been given prompt written notice of a tentative settlement…, and b. Fail to advance payment to the “insured in an amount equal to the tentative settlement within 30 days. SEE YA NEXT YEAR!!
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