Amendment to the Definition of Uninsured Motor Vehicle Expands UM Coverage

The New Hampshire Legislature recently amended the statute that defines what is an uninsured motor vehicle.  Prior to the amendment, the definition of an uninsured motor vehicle included two categories: (1) vehicles for which the liability insurer was unable to make payment of the policy limits because of insolvency, and (2) vehicles where the applicable liability insurance limits are less than the limits of the uninsured motorist coverage applicable to an insured.

Effective January 1, 2015, the definition of an uninsured motor vehicle includes one more category of vehicles – those vehicles where the “available liability insurance has been reduced by payments to others injured in the subject accident to an amount less than the limits of the uninsured motorist coverage applicable to the insured.”  See RSA 259:117.

An example is illustrative of how the amendment expands coverage.  Suppose a tortfeasor causes an accident that injures several people.  The tortfeasor has a liability motor vehicle policy with $1 million in coverage.  Two people are killed in the accident and five other people are seriously injured.  The parties allocate a settlement amongst all parties injured or killed in the accident.  Assume that the people who were injured but not killed in the accident each received $40,000 from the tortfeasor’s liability policy and that this is a fair allocation based on the amount of claims on the liability policy.  Also assume that one of those people had an uninsured motorist policy in the amount of $250,000 and that the person’s damages are over $40,000.

Under the old definition of uninsured motorist coverage, the person with the $250,000 uninsured motorist policy would not be able to recover anything from his uninsured motorist carrier.  This is because the tortfeasor’s coverage ($1 million) was more than the person’s uninsured motorist coverage ($250,000).  However, under the new definition of uninsured motor vehicle, that same person is entitled to receive uninsured motorist benefits.  This is because the claims from the other injured parties in the accident reduced the amount of coverage from the liability insurer to an amount that is less than the coverage under the person’s uninsured motorist coverage.  This is a fair result.  The injured person should be able to collect under his own uninsured motorist policy because the amount actually available to him through the tortfeasor’s motor vehicle policy is less than the amounts available to him through his own uninsured motorist policy.

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Trial Court finds student hit by a drunk driver is entitled to coverage under his school bus’s insurance policy

In 2008, an 11 year old student was dropped off at his usual bus stop along a busy road. As required by the nature of the bus stop, he had to walk with his back to traffic to get to his driveway. There was no sidewalk.

Shortly after exiting the school bus, a drunk driver hit the student from behind, causing serious injuries. The drunk driver had insufficient liability insurance coverage, so we sought underinsured motorist coverage from the school bus’s insurance company.

Coverage under the school bus’s policy depended on whether the student was “occupying” the school bus, as defined in the pertinent policy. “Occupying” was defined in the policy to include getting off of or getting out of a vehicle.

The insurance company denied coverage and we filed a declaratory judgment action in Superior Court. We argued that the student was still getting off of the bus because he was attempting to reach a place of safety when the drunk driver hit him. In D’Amour v. Amica, 153 N.H. 170 (2005), the New Hampshire Supreme Court held that a reasonable interpretation of the term “occupying” included getting to a place of safety.

Following a bench trial, Superior Court Judge Kenneth Brown ruled that the student was entitled to underinsured motorist coverage under school bus’s insurance policy.  Judge Brown found that the student was still occupying the school bus.  Relying on D’Amour, the court found that  he was not in a place of safety because he was walking with his back to traffic on a busy road without a sidewalk when the accident occurred. See Bench Trial Order.

While it may seem that the term “occupying” would be limited to a person who is inside a vehicle, the term is actually broad and can include, as in this case, someone who is injured at a distance away from the vehicle he or she just exited.

Surplus Lines Umbrella Insurance May Be Required to Provide Uninsured Motorist Coverage in New Hampshire

McDowell & Osburn recently settled a case against a surplus lines insurer that did not want to provide uninsured motorist coverage for a 12 year-old girl who was hit by a car while walking across a street.   The young girl suffered a brain injury in addition to broken bones and internal injuries.  The young girl’s parents had an umbrella policy purchased through an independent agent and placed with United States Liability Insurance Company [“USLIC”].  USLIC claimed that it was a surplus lines insurer and pursuant to RSA 405:24 it did not have to comply with the RSA 264:15 mandate that UM coverage equal the liability coverage amount and offered its claimed UM coverage limit of $25,000.

Our office brought a declaratory judgment court action against the insurer seeking the full amount of the coverage purchased by the parents.  We argued that the USLIC policy was essentially the same type of insurance regularly available from any number of admitted insurance companies and the plaintiff’s family presented no unusual risk relative to obtaining coverage.  Therefore, the USLIC policy was not a ‘surplus lines’ policy and the RSA 264:15 mandate that all umbrella policies provide UM coverage in the same amount as liability coverage applied.

The New Hampshire Superior Court agreed that RSA 264:15 applied to the USLIC policy and stated in an order that “[g]enerally, surplus lines insurance insures against liability for unusual risks that fall outside traditional markets and are typically unavailable through state-authorized carriers.”  The Court ordered UM coverage up to the $1,000,000 liability limit of the umbrella policy.  Order of 11.30.11.

After USLIC appealed to the New Hampshire Supreme Court the case settled in February of 2013 for the payment of a confidential amount by USLIC.

You probably have uninsured motorist coverage and don’t know it

Do you have uninsured motorist coverage?  If you have liability coverage for your vehicle, then you do.  New Hampshire law requires that all automobile policies include uninsured motorist coverage in the same amount as liability coverage.  See RSA 264:15.  The reason for this is to protect people who are injured by drivers with no or inadequate insurance.  If you are injured in an accident and the other person has no insurance, or his insurance does not cover all of your damages, you may be able to recover from your own insurance company.

Do Pooled Risk Management Programs Provide Insurance to Public Entities?

In New Hampshire there is a law that immunizes public entities, like cities and counties, from many kinds of personal injury claims (NH RSA 507-B:5).  Most of these statutory immunities are waived to the extent the public entity has liability insurance (NH RSA 507-B:7-a).  In the 1980s the New Hampshire Municipal Association spearheaded an effort to allow Pooled Risk Management Programs [PRMP] to provide insurance coverage to public entities as an alternative to traditional insurance companies.  Since then, two PRMPs were created to provide coverage ranging from health insurance to property insurance called Primex and Local Government Center.  Both PRMPs provide contracts for liability insurance coverage that is the same as insurance sold by insurance companies.  While both PRMPs describe thier products as insurance to the public and the public entities that they cover, they deny that they provide insurance when defending personal injury claims in court in an effort to claim statutory immunity for most types of claims.  There are good arguments, that do not appear to have been reviewed by the trial courts that have considered the issue, that the liability coverage provided by PRMPs is RSA 507-B:7-a insurance that waives most statutory immunity provisions.  Some of those arguments were summarized in an article published in the Trial Bar News, Volument 37, Winter 2012.  A copy of that article is attached:  Arguments Why PRMPs Provide Insurance.

Medical Payments Insurance Coverage

Medical Payments Coverage or “Med-pay” is required by New Hampshire law to be included as part of every car insurance policy.  Med-pay is a no-fault coverage that gives you money for medical expenses if you are injured in an accident.  This benefit is separate from any liability or uninsured motorist insurance coverage.  You are not required to repay any med-pay amount you receive if you receive a settlement or a judgment against the person who caused the accident.