10th Circuit Case Analyzes New Mexico Uninsured/Underinsured Car Insurance Law

A recent Federal Court of Appeals case discusses whether or not a New Mexico family truly rejected additional Uninsured/Underinsured (UM/UIM) coverage as dictated by New Mexico law. The man was seriously injured in a car accident and incurred more than $200,000 in medical bills. The injured man held a policy through GEICO, which covered bodily-injury coverage of $50,000 per person and $100,000 per occurrence. The other driver was underinsured and didn’t have enough out of his policy to make up the difference, so the injured man looked to make an UM/UIM claim.

The initial policy issued in 2009 also provided UM/UIM bodily coverage limits of $25,000 per person and $50,000 per occurrence on each vehicle. Later, GEICO sent out forms to the family titled a “new business packet” that included the policy, endorsement declarations, and UM/UIM option form. Two pages were provided with check boxes on each page. The first box was next to a paragraph that showed the policy holders agreed that they understood the policy and the election of UM/UIM coverage, and it was followed by a second paragraph rejecting the UM/UIM bodily injury coverage. The box on this page was checked. The second box was next to a paragraph with an explicit acceptance of UM/UIM coverage, followed by several options of varying amounts of coverage. This was left unchecked, and the whole form was signed and returned to the insurance company. The company acknowledged the change by sending back an acknowledgment along with a refund of the amount paid for that coverage.

Less than three months later, the husband was injured in the car accident. When they sought coverage under the UM/UIM policy, the insurance company denied the claim and pointed to the rejection. The family filed suit, and the insurance company argued that the rejection was valid under the New Mexico law, which requires written rejection of the explicitly written policy option. The victim countered that the option form did not meet the legal standards because they were not presented with a discussion or explanation of the stacked coverage. The 10th Circuit Court agreed with the insurance company and found that the signed form complied with New Mexico law and was consistent with other recent state Supreme Court decisions.

The injured had also previously argued that his family purchased policies for four vehicles, intending to stack coverage of each policy to maximize coverage. The injured claimed that the policy rejection form should have explicitly discussed the cost of UM/UIM coverage per car alongside the available coverage to meet the requirements under New Mexico law. The Court of Appeals determined that the policy rejection form met the threshold established by case law by providing the relevant premium cost, and it was not required to list the total amount of stacked coverage.

When you’ve been injured in a car accident, you need an attorney who knows what the law requires within car insurance policies. The New Mexico car accident attorneys at the Parnall Law Firm have the personal injury experience you need to aggressively negotiate and litigate your case. Our office will tirelessly pursue the damages you need to cover household bills and medical expenses incurred as a result of your injury. For a free, confidential consultation call 505-332-BERT today.