New Mexico Court of Appeals Decision on UM/UIM Policies

At the end of November, the New Mexico Court of Appeals issued a ruling in Curry v. Great Northwest Insurance Co., where they declined to require insurance policies to list the uninsured and underinsured (UM/UIM) motorist coverage on the rejection form. The guiding statute for UM/UIM insurance coverage is NMSA 1978, Section 66-5-301 (1983), which requires that every automobile liability insurance policy issued in New Mexico includes UM/UIM coverage. The coverage cannot be excluded unless it has been offered to the insured and the insured has exercised their right to reject the coverage through some positive act. The Court in this case relayed that the statute is construed liberally by the Supreme Court to provide the maximum amount of coverage and protection for the insured.

The injured couple was in a serious car accident that was covered by a standard insurance policy. However, the costs incurred as a result of the injuries far exceeded the coverage from the liability carriers, so they filed an underinsured motorist claim. The insurance company denied their claim based on the written rejection of the UM/UIM coverage the injured signed when they purchased their policy. The couple filed suit claiming that the insurance company denied their claim in error, based upon a recent New Mexico Supreme Court decision, Jordan v. Allstate Ins. Co., 2010-NMSC-051, 149 N.M. 162, 245 P.2d 1214, alleging that a list of premium charges corresponding to the available UM/UIM coverage options was not included on the rejection form. The injured not only sought a determination that the rejection form was invalid, but that the policy should be reformed as a matter of law that provides UM/UIM coverage equal to their limits of liability.

The insurance company claimed that the injured misread the holding in Jordan, saying that it followed the requirements in Jordan by providing UM/UIM coverage options along with the corresponding premium information. It asserted that the decision does not require the information to appear on the written rejection of the UM/UIM coverage. The court limited its assessment to whether the law requires the UM/UIM coverage options on the rejection form and noted that the injured did not raise the issue of whether the insurance policy, in this case, included the UM/UIM coverage options in writing. Ultimately, it determined that the Supreme Court in Jordan did not require the UM/UIM coverage options and corresponding premium information to appear on the written rejection form included with the policy. The Court of Appeals felt that the intent behind that decision was to ensure that the choice to reject the UM/UIM coverage was knowing and intelligent and that this was achieved by the inclusion in the policy signed by the insured.

The New Mexico auto accident attorneys at Parnall Law Firm aggressively fight for our client’s rights under New Mexico law for the maximum amount of compensation available under your insurance policies. We understand that insurance companies are not working in your best interest, and we have the experience necessary to litigate and negotiate the settlements that you deserve. If you’ve been injured in an accident, call today for a free consultation on your case at (505) 332-2378.