Waiver of Uninsured Motorist Coverage

More than 1 in 4 drivers on Mississippi roads are uninsured.  Uninsured motorist (UM)  is supposed to work like this…..If you get injured by a vehicle due to the negligence of someone with no or little insurance, then your UM insurance pays for your medical bills, loss of wages, and pain and suffering up to the limits of your UM policy.  Quite often we see UM policies that are written for less than the insured’s liability limits.  In a recent case, our client carried $250,000 of liability coverage, but only $25,000 in UM.  Why?  Because the insurance carrier had the client sign a waiver to reduce the UM.

For several years there has been some degree of uncertainty regarding waiver of uninsured motorist benefits.  Did the waiver have to be in writing?  Did the waiver have to be knowing and intelligent as is the case with waiver of other rights?  Did the agent have a duty to fully explain UM?  Did the agent have a duty to explain that UM could be purchased in an amount over the minimum and up to the limit of liability coverage?  There was considerable disagreement.

The Mississippi Supreme Court handed down Honeycutt v. Coleman, et al (NO. 2010-CT-01470-SCT) yesterday which should provide some clarity.

First, any waiver of UM coverage must be made knowingly and intelligently, and the
waiver must be in writing. Second, the insurance carrier bears the burden of proving that any
waiver of UM coverage was made knowingly and intelligently. Third, the insurance carrier
may meet that burden of proof by establishing that it provided an explanation, appropriate
to the client, of UM coverage. The insurance carrier also may establish that the client was
fully knowledgable through other sources of the purposes and benefits of UM coverage.
Fourth, any document signed by the client which allegedly states that an explanation was
given to the client may be considered by the fact finder, but this is not dispositive as to
whether the client gave a knowing and intelligent waiver of UM coverage. Fifth, the client
may rebut, through appropriate evidence, any proof offered by the carrier. And sixth,
whether a client made a knowing and intelligent waiver of UM coverage ultimately is a
question of fact to be resolved by the trier of fact.

Honeycutt, a page 8.  It would appear that a valid waiver will require the agent to explain the benefits of UM and the consequences of rejecting UM.  This is a step in the right direction.  Typically, the clients we see in car wrecks do not even know about uninsured motorist coverage.  They simply signed documents where their agent told them to sign and leave with the assurance of the agent that they have “full coverage.”

I said it once and I will say it again……. Compared to other types of insurance, UM is very cheap.  Call your insurance agent.  Buy UM, get all you can and NEVER waive UM coverage.  Protect yourself and protect your family.  Given that 28% of Mississippi drivers do not have auto insurance, you are risking your financial future every time you drive if you do not have adequate uninsured motorist coverage.

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About randywallace
I am a husband, father, attorney, outdoorsman and cook.

3 Responses to Waiver of Uninsured Motorist Coverage

  1. thusbloggedanderson says:

    I am not versed in this area of the law, but I don’t understand why this particular contract is an exception to the rule that you’re held to have read what you signed. Is there a statutory provision to that effect, or is this judicially created? Summary judgment will no longer exist in cases where an insured swears nobody explained UM waiver to him.

  2. randywallace says:

    Anderson, I suspect you are correct that SJ will no longer exist in many of these cases. When it comes to waiver of this statutory right, it appears the Court is looking to the substance rather than the form of the waiver. I cant count the number of these waiver forms I have reviewed in the past for clients that had no idea about uninsured motorist benefits.

  3. thusbloggedanderson says:

    Sure, and “I’ve read the contract” is maybe the quintessential legal fiction, but I’m just at a loss why THIS particular class of contracts, as opposed to, oh, arbitration clauses, or 20% interest penalties for breach of contract, is given special treatment.

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