New Mexico Injury Attorney Blog

The Weed Warrior line of cases has opened up a wave of claims against auto insurance companies for the past denial of uninsured/underinsured motorist coverage. As a result of the Weed Warrior and the cases leading up to it, insurance companies and drivers alike are scrambling. One issue that has yet to be resolved entirely is what exactly is the statute of limitations on these claims?

For some background, Weed Warriors and the many other appellate court cases addressing the rights of drivers in UM/UIM coverage situations sets forth the duties of insurance companies in obtaining waivers of UM/UIM coverage. In a nutshell, in order for a waiver to be effective, there are numerous hurdles that auto insurance companies must overcome.

The gist of these cases is that the insured driver must fully understand and agree to the waiver. The reason for this is simple, UM/UIM is about the only bargain that a driver will get when purchasing insurance. In fact, the coverage is both essential in New Mexico which has the highest rate of uninsured drivers in the country and inexpensive. Simply put, it is a better deal for the driver than the insurance company.

These facts have led to many insurance companies duping drivers into waiving this essential and inexpensive coverage. As a result, there has been a wave of cases over the past several years requiring that waivers be in writing, fully disclosed and signed by the insured driver. Weed Warriors took this one step further requiring insurance companies to offer UM/UIM, disclose the costs of UM/UIM coverage and the difference in premium that would result from the waiver. In short, it must be a knowing waiver of coverage.

There is a strong public policy in New Mexico of requiring drivers to carry insurance. There is an equally strong policy in light of the high rate of uninsured drivers of providing UM/UIM in the event that an uninsured or underinsured motorist causes injuries to others. These policies are clear from the recent New Mexico Appellate Court decisions.

Equally clear is that many UM/UIM claims have been wrongfully denied in the past by these high standards. The court decisions make clear that the decisions are retroactive meaning that past wrongful denials must be remedied. This has resulted in thousands upon thousands of letters being sent by highly conscientious insurers to their insured drivers on past auto accidents. These went out pretty early after the Weed Warrior cases. Unfortunately, many less conscientious insurers have failed to do likewise.

This leads to the very important question and the subject of this post (if not yet apparent) of when the statute of limitations will run on these claims. The statute of limitations will be governed by the 6 year statute of limitations applying to contracts. The question becomes when does the 6 years begin to run?

The insurance companies are taking the position that the claims run 6 years from the date of the accident. Plaintiff's attorneys that represent those drivers wrongfully denied UM/UIM take the position that the 6 years begins to run from the date of the wrongful denial. This issue will likely be the subject of the next round of UM/UIM appellate court decision.

The outcome will make a huge difference to both insured drivers and to the insurance companies. The important thing for insured drivers facing this situation to take from this is that whatever the outcome on this dispute, there is a deadline under the statute of limitations. Missing the deadline will result in a denial of claims. It would be most prudent to assume that the deadline will be the shorter of the two beginning from the date of the accident. To assume otherwise may result in a complete bar to past UM/UIM claims.

If you are facing this situation, you should immediately contact a personal injury attorney with experience in insurance and specifically UM/UIM insurance claims. Delay in addressing these matters could be fatal to your claims. Indeed, this is what some insurance companies are no doubt hoping.

Collins & Collins, P.C.
Albuquerque Attorneys

Recently, the United States District Court for the District of New Mexico dealt a harsh blow to automobile insurers when it forced an insurance company to provide uninsured motorist coverage to a woman who had signed a form turning down the coverage.

This decision upheld New Mexico's strict rules addressed in several previous posts requiring specific types of disclosures and notices to be given to anyone who is turning down uninsured/underinsured coverage (UM/UIM coverage). Because in this case the insurer, Nevada General, hadn't complied with all of New Mexico's requirements for waiver of coverage, it was forced to pay the benefits.

The facts of Nevada General v. Encee are pretty straightforward. The insured plaintiff was covered by a Nevada General auto policy that provided only bodily injury liability coverage that would cover her in the event she was negligent and injured someone else. She was then injured in an accident where the other driver had no insurance coverage.

Ms. Encee requested UM/UIM insurance benefits to cover her injuries even though UM/UIM coverage was not in her policy. Nevada General refused to provide coverage because Ms. Encee had refused the coverage in writing and signed a form stating in three different places that she did not want UM/UIM insurance. However, the form did not exactly comply with New Mexico's strict requirements for a "knowing" waiver, as set out in Jordan v. Allstate. Specifically, the form failed to set out the difference in Ms. Encee's premium costs relating to the cost of her insurance with and without UM/UIM coverage, which was required by the New Mexico Supreme Court in Jordan. The federal court forced Nevada General to provide the UM/UIM coverage to Ms. Encee even though she never paid for it.

Nevada General argued that being required to provide UM/UIM insurance coverage to Ms. Encee was unconstitutional. Nevada General claimed that the court's enforcement of the New Mexico UM/UIM waiver requirements imposed an illegal "taking" under the Fifth and Fourteenth Amendments of the United States Constitution and that it violated the "Contract Clause" of the United States Constitution. Both of these arguments were flatly rejected by the federal court.

Although, it may seem extreme, this decision upholds New Mexico common law protection of individuals who are entitled to uninsured motorist coverage when insurance companies do not provide enough information for them to make a decision about whether they want to purchase coverage. All too often, companies play fast and loose with the disclosure requirements and then deny coverage, claiming that the individual never asked for this very important benefit. Many times, people don't realize that they did not have this coverage until it is too late. In New Mexico this can be disastrous in light of the high number of uninsured and underinsured drivers in the state.

If you have been denied coverage for uninsured or underinsured motorist insurance in New Mexico and you believe that you are entitled to it, you very well may have a claim. In fact, even if you settled your claims in the past, were denied uninsured/underinsured coverage, and the claim has long been closed, you may have a claim against your own insurance company for UM/UIM coverage up to the your liability limits.

If you have been denied UM/UIM coverage now or in the past, you should contact at attorney experienced in UM/UIM insurance coverage issues. Collins & Collins is experienced in handling all types of automobile injury cases and is well-informed on the issues relating to UM/UIM coverage.

Collins & Collins, P.C.
Albuquerque Attorneys

Uninsured or Underinsured motorist coverage (UIM) is an important optional coverage offered by insurance companies. UIM provides coverage for an insured when the insured is in an automobile accident that is another party's fault and either the at-fault party has no insurance or does not have sufficient insurance coverage to compensate the insured fairly for his injuries and damages.

Because the insurance policy is a contract, there are terms and conditions that the insured must follow so that the insurer is obligated to meet the terms of the insurance coverage. One term or condition in most every automobile insurance policy is the requirement that the insured obtain approval from his insurer to settle a personal injury claim for damages against an at-fault party IF the insured intends to bring a claim under his own insurance policy, or under a policy that he has coverage, for underinsured motorist coverage benefits.

The reason for this requirement is that when an insured settles a claim against a liable party and signs a release agreement that releases that person from any further liability or claims that arise from the accident, the insured's insurance company cannot bring a claim in the future against the liable party in subrogation of payments the insurance company may pay for its insured. In subrogation claims, the insurer "stands in the shoes" of its insured so that any claims the insured may have, the insurer also has. When the insured releases a negligent party for damages, neither he nor his insurer may bring any further claim for damages or reimbursement, in the case of the insurer.

The 2007 New Mexico Court of Appeals case of Salas v. Mountain States Mutual Cas. Co., reaffirmed past cases that established the insured's duty to obtain permission from its insurer to settle a liability claim when the insured intended to bring an UIM claim. The Court concluded that the insured's settlement of the claim and release of the tortfeasor extinguished the insurer's subrogation rights and triggered a rebuttable presumption of prejudice. "Rebuttable presumption" meaning, that if the insured could demonstrate that the insurer was not prejudiced, the insured's failure to obtain permission would not be a bar to bringing the UIM claim. One situation that would rebut the presumption of prejudice is the situation wherein the tortfeasor is judgment proof and the insurer would not be able to recover any money paid in subrogation even if the insured had not released the at-fault party.

An interesting twist in the Salas v. Mountain States case is that, ultimately, Ms. Salas, a passenger in the insured vehicle and therefore Class 2 insured, was able to bring her UIM claim because she was not aware that there were UIM benefits available. Ms. Salas had made a claim under the Mountain States policy for medical payments coverage, but was not aware that there was also uninsured/underinsured motorist coverage. Because Mountain States had failed to advise her of the availability of UIM benefits, the Supreme Court ruled that under the circumstances of the case, the insurer could not deny Ms. Salas' ability to make the UIM claim.

Auto accidents can raise some confusing and significant insurance issues. There have been numerous developments in the courts over the last few years regarding the obligations of insurers in UIM cases. If you have been involved in a car accident where UIM issues are raised, you should seek the guidance of an experienced personal injury attorney.

Collins & Collins, P.C.
Albuquerque Attorneys

Most consumers purchase automobile insurance to protect themselves or their family in case of an auto accident. Some purchase auto insurance because it is the law, mandated by the state legislature.

In New Mexico, drivers must maintain minimum insurance policy limits of $25,000 per person, $50,000 per occurrence and $10,000 for property damage. This means that if you are in an accident that you cause, an injured party can make a claim against your insurer for a maximum of $25,000 for the individual's injury. The total amount of coverage available is $50,000 per occurrence, meaning that even if there are numerous parties injured, the total paid by your insurance company to all claimants together is $50,000.

States require minimum insurance coverage under a public policy theory that insurance protects motorists for the risk of driving. Insurance coverage protects both those injured in the accident and the person who causes the accident who can be held financially responsible.

However, it is obvious that these minimum amounts do not necessarily protect injured parties when there is significant injury or when there are numerous injured parties. Similarly, minimum liability coverage does not necessarily protect the person at fault for the accident as the person will be held personally responsible for damages incurred by injured parties in excess of his insurance coverage. Consequently, minimum insurance coverage is a benefit in many situations, but certainly not all.

It is also important for consumers to understand what their insurance coverage actually pays for. Liability insurance is insurance paid to a claimant for damages caused by the insured. The insured, if he is injured in an accident for which he is at fault, cannot seek compensation under the liability coverage of his policy. Likewise, without certain elective coverage, he cannot seek any recovery from his own insurance company even when the accident was not his fault. The only coverages that are available in these situations are optional coverages, such as medical payments coverage or uninsured motorist coverage. Without these optional coverages even if the insured is not at fault, he cannot seek money from his insurer to pay for his damages.

A different situation exists with regards to personal injuries suffered by occupants of the insured vehicle. If you are in an accident that you are responsible for, you cannot make a claim for personal injuries against your own insurance policy. If your son and his friend are in the vehicle with you and you cause an accident, your son's friend can obviously make a claim against you under the liability portion of your insurance policy for his personal injuries and damages. However, your son may also make a claim against you, and your insurance company will pay his personal injury claim just as it would his friend's because you are responsible for his damages.

With liability claims comes the risk of future insurance premium increases that follow you well into the future. After a number of years, the increase due to the accident (and liability claim against your insurance company) will be removed and your premium decreased as long as you have not had other accidents for which you are responsible. If there are additional accidents in a matter of a few years, an insurer may cancel insurance coverage due to the perception that the insured is at a high risk of future claims.

Insurance coverage issues can be somewhat confusing. Often times, there is no coverage when one might expect it. On other occasions, an experienced personal injury attorney will be able to identify coverage that you did not know was available. And identification of coverage can be half the battle in a personal injury claim.

Collins & Collins, P.C.
Albuquerque Attorneys

It is well established in New Mexico that a party injured in an auto accident can make a claim against his or her underinsured motorist policy coverage for both compensatory damages and punitive damages. Typically, to get to underinsured coverage, the injured party must recover liability policy limits from the other driver's insurance.

In Farmers v. Sandoval, the New Mexico Court of Appeals addressed this general rule in the case of an injured party with nominal compensatory damage claims and much greater potential punitive damage claims in a DWI related auto accident.

The at fault driver's Mid-Century Insurance Company liability policy excluded coverage for its driver for punitive damage awards which would typically be recovered in a DWI auto accident. This exclusion of punitive damages coverage coupled with the injured party's small compensatory damage claim prevented recovery for the full liability policy limits under the Mid-Century policy.

The injured party then made an underinsured motorist claim against her own Farmer's policy. The injured party sought recovery for the full amount of her underinsured coverage less the actual recovery from Mid-Century. Farmers disputed the claim arguing instead that Farmers was entitled to an offset for the full amount of the Mid-Century liability limits and not lessor recovery due to the punitive damages exclusion. In essence, Farmers was attempting to piggyback the punitive damage exclusion under the Mid-Century policy.

The Court of Appeals disagreed with Farmers on a number of grounds. First, the Court cited the purpose of underinsured coverage which is to protect the New Mexico driving public from uninsured and underinsured drivers. The underlying objective of uninsured/underinsured motorist coverage (UM/UIM) is to make the injured party whole, at least to the degree made possible by the underinsured coverage.

Clearly, injured parties have the right to make a punitive damages claim against their UM/UIM policy. This right should not be constrained by the contractual abrogation of duty on the part of the opposing insurance company. The Court of Appeals recognized that to allow Farmers argument would result in an injured party recovering less in an accident involving an underinsured driver than an accident with a driver that had no insurance at all. The Court stated that this clearly defeated the remedial purpose of UM/UIM coverage.

In short, the Court ruled that that "Farmers' offset is limited to the amount of liability proceeds actually received by Defendants under the Mid-Century policy" and not the full amount of the Mid-Century liability limits. This once again reaffirms New Mexico's commitment to protecting the public against uninsured and underinsured drivers as evidenced by a steady stream of appellate court cases over the last couple of years aggressively enforcing UM/UIM recovery rights.

Collins & Collins, P.C.
Albuquerque Attorneys

The affects of Jordan v. Allstate, Romero v. Progressive and Progressive v. Weed Warrior are already being seen in previously settled uninsured and underinsured auto accident claims in New Mexico.

In short, as addressed previously, acceptance by an insured of uninsured and underinsured coverage below liability policy limits constitutes a rejection of coverage. It is well established in New Mexico that a rejection of uninsured and underinsured coverage must be in writing,and attached to the policy.

As addressed in several prior posts, uninsured and underinsured motorists coverage is extremely important for motorists. This particularly the case in New Mexico which has the highest rate of uninsured motorists in the country with countless more carrying $25,000 minimum liability coverage.

As a result, a driver in an auto accident in New Mexico will in all likelihood be dealing with a negligent driver who has either no insurance or very little insurance. The injuries suffered in car accidents often require medical expenses greatly in excess of the $25,000 minimum liability limits required by law. As such, the $25,000 minimums will often not even cover medical expenses much less other damages such as lost wages which are almost universally present in serious automobile accidents.

The cases of Jordan, Romero and Weed Warriors have corrected a fairly common problem. Drivers often accepted uninsured and underinsured limits below the liability limits. Some did so knowingly with the sole purpose of saving a few dollars a month on premiums. Many others were convinced to reject UM/UIM coverage. In fact, uninsured and uninsured coverage is perhaps the most economical and essential coverage provided for drivers.

As a result, there were and will continue to be those companies that will try to convince drivers that uninsured and underinsured coverage is not necessary and a waste of money. These cases will not stop this practice going forward. But they do address past problems. And they do acceptance of uninsured and underinsured covers be in writing, signed by the insured, and attached to the policies. Hopefully, this will trigger the suspicions of drivers. After all, why would the law require all these hurdles for an insurance company if it were not in the best interests of the driver to have this coverage?

As a result of the cases, some responsible insurance companies are taking a proactive stance actually sending out letters to all drivers that have made uninsured and underinsured claims in the past. The letters alert the drivers of possible rights to additional coverage on their past claims. It is safe to say that many insurance companies will not behave as responsibly.

Not only will some companies not send out these letters, when they do receive a claim, they will fight tooth and nail as they fight all claims on their policies. I will not name those companies here, but a quick review of JD Power's annual rating of auto insurance providers will give you a pretty good idea of what to expect from your insurance company.

And to show that I am not totally hostile against all insurance companies, only those that are abusive, dishonest or otherwise fail to honor their responsibilities, I would like to recognize own insurance provider of over 25 years, State Farm, as being both in the top 5 of the JD Power list and among those companies sending out letters to their customers to notify them of their rights.

Collins & Collins, P.C.
Albuquerque Attorneys

The New Mexico Supreme Court in Progressive v. Weed Warriors established clearly that acceptance of uninsured/underinsured motorist coverage (UM/UIM) at levels below insurance liability limits constitutes a rejection of coverage. As such, the Court held that a written rejection attached to the policy was required for the rejection of coverage to be binding on the insured driver.

Several auto accident cases involving varying UM/UIM issues were basically on hold awaiting the ruling in Weed Warriors. These cases could not be decided without first having the ruling in Weed Warriors. The New Mexico Supreme Court case of Jordan v. Allstate consolidated these three cases (Jordan v. Allstate, Romero v. Progressive and Lucero v. Trujillo) to address a number of questions left remaining following Weed Warriors.

There were a number of very important issues raised in these cases. As a rejection of coverage per Weed Warriors, the first issue that arises is what form the rejection must take to be valid. Clearly under New Mexico law, a rejection of coverage must be in writing and attached to the policy. Jordan went further to state that the for this requirement to have any meaning insurers must provide premium charges for each level of UM/UIM so that an insured can make an informed decision. Remarkably, this was not the case in the past and insurers had little incentive to quantify the meager savings associated with rejections of UM/UIM coverage.

Though this may seem like little, it is a large stride forward in consumer protection. The insurance companies argued this was a violation of freedom of contract. The Court countered, essentially stating that the essence of freedom of contract is full disclosure. This would of course include pricing.

Perhaps most remarkable in the Jordan case is the fact that the holding was made retroactive. This means that all those rejections of UM/UIM coverage below liability limits back to the date of the statute are invalid in the absence of written waiver, attached to the policy, under full disclosure of UM/UIM costs terms.

It is safe to say that many such rejections were invalid. The insurers argued that this was unfair and would result in unexpected costs to the insurers. The Court responded that the statute requiring written waivers of UM/UIM was clear as to its requirements so that there was no unfairness to the insurance companies. Moreover, the Court stated that the insurance companies should be held to bear the burden of their own misinterpretations of the statute, not the innocent and far less knowledgeable and legally sophisticated insured.

Collins & Collins, P.C.
Albuquerque Attorneys

When a person suffers personal injuries in a car accident in New Mexico, there is a pretty good chance that the only insurance coverage available will be from their own uninsured/underinsured coverage (UM/UIM). New Mexico leads the nation in uninsured motorists. Unfortunately, New Mexico drivers are just as likely to carry no uninsured or underinsured motorist coverage.

Often times, drivers do not carry UM/UIM coverage because they carry no insurance at all. In addition, there seemed to be a trend among some, not all, insurance companies encouraging the waiver of UM/UIM coverage. There have been numerous cases addressing the requirements for an insured rejection of uninsured/underinsured motorist coverage.

There is public policy in New Mexico for drivers to carry UM/UIM coverage. As such, the coverage is imputed unless rejected by the insured. For an effective rejection of coverage, the insurance policy must include a written rejection of the coverage to be valid.

The New Mexico Supreme Court has now expanded the scope of the rules for a valid rejection of uninsured/underinsured coverage to an insured driver's election to carry UM/UIM at an amount below the policy's liability limits.

Essentially, the Court held in Progressive Northwestern Insurance Company v. Weed Warriors that an election to carry UM/UIM at levels below liability limits constitutes a rejection of UM/UIM. As a rejection, it must therefore be in writing and attached to the policy.

The Court reiterated the State's public policy of expanding UM/UIM coverage for the State's drivers. The Court flatly rejected any suggestion that a driver must request the coverage. Instead, the coverage must be offered to the insured. The Court stated that coverage cannot be rejected unless it is first offered. This seems obvious to most of us outside those insurance companies that were discouraging UM/UIM coverage. In addition, the Court stressed the fact that the coverage must be offered to promote the public policy toward maximum UM/UIM coverage for all drivers.

In short, Weed Warriors has expanded prior case-law to mandate that drivers be offered UM/UIM coverage to the same level as their liability limits. Though drivers are free to choose lower limits or to reject UM/UIM coverage altogether (a very bad idea), any such rejection must be in writing and attached to the policy.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

The New Mexico Court of Appeals addressed the issue of uninsured/underinsured motorists insurance once again in Gulbransen v. Progressive Halcyon Insurance. The case is unique in that it addressed uninsured/underinsured (UM/UIM) coverage for property damage. Past cases on the matter have limited the discussion to personal injuries.

There is no shortage of case law on the issue UM/UIM coverage and the requirements for waiver of such coverage. The bottom line under the law is in order for an insured driver to waive UM/UIM coverage, the insurance company must obtain a written rejection of the UM/UIM coverage. In the absence of a written rejection, the auto insurance policy will be found to carry UM/UIM coverage equal to the liability policy limits.

Though the Court in Gulbransen dealt with property damage coverage, the outcome is much the same. In the absence of a written rejection of UM/UIM property damage coverage, the UM/UIM coverage will be imputed to be the same as the liability coverage.

The Court references the strong public policy in the provision of UM/UIM coverage. The Court cites Arias v. Phoenix Indemnity stating that it is statutorily mandated that UM/UIM coverage be offered. The Court rejected Progressive's argument that this requirement was meant only to cover bodily injuries. In response, the Court stated that there was an underlying legislative intent to protect drivers from uninsured and underinsured motorists. This goal is particularly important in New Mexico which has the nation's highest percentage of uninsured motorists.

Interestingly, the Court noted that there were a number of cases up on cert to the New Mexico Supreme Court addressing the issue of UM/UIM waivers of coverage. The Court noted that they were relying on those cases (Romero, Chen and Jordan) until such time that they are reversed. This qualifying statement may or may not bode well for insured drivers in the future.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

In case of an uninsured/underinsured motorist claim on an automobile accident in New Mexico, the law requires that an insured party notify their insurance company of the uninsured/underinsured claim "as soon as practicable."

The requirement is a little bit vague but what it means in practice is that you must notify your carrier of an uninsured/underinsured motorist claim as soon as it becomes evident that the insurance coverage of the other driver is inadequate to compensate you for your injuries and damages.

This determination may take some time since insurance companies are not always willing to turn over insurance policy limits information on their drivers. Often times, insurance companies will turn over policy limits information only when a demand in excess of insurance policy limits is made and the insurance company feels that legitimate claims may be made in excess of policy limits.

This information may come well into the personal injury claims process. In fact, it may well be that the policy limits are not known until formal discovery is conducted in the litigation process. As such, "as soon as practicable" could be weeks, months or years after the accident has occurred. Only once an insured driver knows of a possible uninsured/underinsured motorist claim must the driver notify his or her insurance company of the claim.

The statute of limitations, always something to watch closely in every personal injury matter, is less of a concern in uninsured/underinsured motorist claims. Personal injury claims, including auto accidents, have a 3 year statute of limitation. The limitation period is shortened to 2 years in case of governmental defendants. However, the statute of limitations on a uninsured/underinsured motorist claims is 6 years. An uninsured/underinsured motorist claim is contractual in nature and disputes on written contracts have a 6 year statute of limitations.

Keep in mind that the statute of limitations is not the same as the notice requirement. The notice to a driver's insurance company must be made once the uninsured/underinsured claim is known. Of course, if this comes years after the accident, the longer statute of limitations on uninsured/underinsured claims provides the driver with added protection.

Related Reading:
Statute of Limitations on Past Denial of Uninsured/Underinsured Motorist (UM/UIM) Coverage in New Mexico
Uninsured/Underinsured Coverage: An Insurer's Duty to Passengers in New Mexico
Uninsured/Underinsured Coverage: An Insurer's Duty to Passengers in New Mexico - The Sequel

Collins & Collins, P.C.
Albuquerque Attorneys

There is a strong public policy for the provision of uninsured/underinsured motorist (UM/UIM) coverage in auto accidents. In New Mexico, this policy dictates a liberal reading of both the statute governing uninsured motorist coverage as well as the auto insurance policies themselves.

An auto insurance policy will be held to provide uninsured coverage to the same degree as the liability coverage unless there is a specific signed rejection of the UM/UIM coverage attached to the policy. In addition, the UM/UIM coverage will have the same geographical coverage as the liability coverage under the policy. Because insurance policy limits are almost always an issue in car accident cases, the laws and cases governing uninsured motorists are critical. The issue can even arise on vacation or other travel abroad.

In the 2001 case of State Farm v. Marquez, the New Mexico Court of Appeals held that UM/UIM coverage in the policy extended to coverage for an automobile accident that occurred in Mexico. The court held this despite the fact that the policy had a specific exclusion of uninsured/underinsured coverage in Mexico.

The court ruled that because the policy provided liability coverage in Mexico, there was UM/UIM coverage as well. The court ruled that the policy behind uninsured/underinsured motorist coverage dictated that the uninsured/underinsured coverage be territorially coextensive with the liability coverage despite the language in the policy excluding uninsured motorist coverage in Mexico.

The court recognized that an insurance policy could exclude both liability and uninsured motorist coverage outside the United States. However, the uninsured coverage would follow the liability coverage. The court expressly refused to address whether or not an insured driver could reject uninsured coverage outside the United States. In light of subsequent case-law, it is clear that a policy holder could waive uninsured coverage outside the U.S. when the rejection is signed and properly attached to the policy.

If you have suffered personal injuries as a result of an automobile accident outside the United States, you would be well advised to have an experienced accident and injury attorney review your policy for possible coverage. Chances are that there is no coverage on the other driver and little chance of direct recovery through a lawsuit against the other driver.

Related Reading:
Uninsured/Underinsured Coverage Has Broad Scope in New Mexico
Recovery of Punitive Damages Under Uninsured/Underinsured Motorists Coverage
Notice Requirements in New Mexico Uninsured/Underinsured Motorist Cases

Collins & Collins, P.C.
Albuquerque Attorneys

Once again, the New Mexico Court of Appeals has reinforced the public policy of making uninsured/underinsured motorist (UM/UIM) coverage a part of every automobile insurance policy issued in New Mexico. Farmers v. Xian Chen stated just that in its ruling further reiterating that alleged waivers of uninsured/underinsured coverage are to be strictly construed against the insurer.

In Xian Chen, the Chens obtained liability coverage in the amount of $100,000 per person, $300,000 per occurrence. Farmers also had the Chens sign an Uninsured Motorist Election in the amount of $30,000 per person and $60,000 per occurrence. The Election stated that the Chens had the option of purchasing greater UM/UIM coverage but the Election was not attached to the policy and was not clear as to the amount of the coverage that the Chens were giving up. Ms. Chen was involved in an accident that killed her and injured her son. The accident was caused by the negligence of an underinsured driver.

Farmers denied the underinsured coverage claims over the reduced $30,000/$60,000 limits. The court in Xian Chen called upon several prior cases in the area in refuting Farmers' position. The court first cited Romero v. Progressive to state that insurers have a duty to offer UM/UIM coverage up to the liability limits of the policy. An election to carry less than liability limits constitutes a rejection of UM/UIM coverage. The court then cited Romero v. Dairyland for the rule that a valid rejection of UM/UIM coverage must clearly and unambiguously alert the insured to the rejection of UM/UIM coverage. The court then moved on to the recent case of Marckstadt v. Lockheed Martin where two essential requirements were set forth for the rejection of UM/UIM coverage; 1) there must be a written rejection of UM/UIM and rejection to be valid must be made knowingly and intelligently, 2) evidence of the rejection must be attached to the policy, and consistent with Romero v. Dairyland, must "clearly and unambiguously call to the attention of the insured that fact that such coverage has been waived."

The Court in Xian Chen found that the Chens had not knowingly and intelligently waived UM/UIM coverage because no single document in the transaction contained all the information necessary for a "knowing and intelligent" waiver. Instead, the waiver language, the liability limits, the UM/UIM limits and the amounts rejected were scattered across several documents. For the same reason, the notification requirement in Marckstadt was not met. Due to the deficiencies in the waiver, the Chens were entitled to the full amount of UM/UIM coverage.

There are a couple of lessons to be learned from this case. First and most important, it is extremely unwise to waive UM/UIM coverage. This case perfectly illustrates the dangers of uninsured/underinsured motorist in New Mexico which has the highest rate of uninsured drivers in the nation. Driving without UM/UIM coverage is often devastating. Realistically, even the higher limits of $100,000/$300,000 did not come close to compensating Mr. Chen and his son for the loss of a wife and mother. Which brings us to the second lesson, get as much UM/UIM as you can. Related to the first two lessons, there are insurers that will do whatever they can to get you to waive UM/UIM coverage completely or take reduced UM/UIM coverage. They may do this by either by hiding the ball as was done in the Xian Chen case or they may take the more common route of just flat out convincing drivers that UM/UIM coverage is a waste of money.

Any driver facing this situation should ask themselves why the state would go through so much trouble to force UM/UIM coverage and more importantly why some insurers go to such lengths to avoid it. This should be a rather quick analytical process. Upon completion, the driver should promptly find a new agent and a new insurance company that is equally concerned with the driver's welfare as it is for its own profits.

Related Reading:
Rejection of UM/UIM Coverage Must be in Writing but Need Not be Signed by Insured??
Statute of Limitations on Past Denial of Uninsured/Underinsured Motorist (UM/UIM) Coverage in New Mexico
Federal Court Forces Insurance Company to Provide Uninsured Motorist Benefits

Collins & Collins, P.C.
Albuquerque Attorneys

The 2005 New Mexico Court of Appeals case of State Farm v. Leubbers points out the extremely broad scope of coverage provided by uninsured/underinsured motorist coverage. The case involved numerous issues surrounding an uninsured/underinsured motorist claim for damages made on behalf of a minor whose father was shot and killed in a drive-by shooting. Each of the issues seemingly weighed against coverage. In fact, the district court dismissed the claims on State Farm's Motion for Summary Judgment. The Court of Appeals reversed suggesting expansive and liberal enforcement of uninsured/underinsured motorist coverage.

The facts get even more interesting than the implication of uninsured/underinsured motorist coverage for a victim of a drive-by shooting. Most would assume that there is no such coverage for such an act. The court almost glossed over this aspect of the case seemingly taking it for granted that the use of the vehicle in the act brought into play uninsured/underinsured motorist coverage. Next, the court had to address the minor child's loss of consortium claims for the loss of his father. And, the child had yet to be born. The mother was only four weeks pregnant with the plaintiff child.

The court found that the child, though unborn at the time, was entitled to make a claim for loss of consortium for the loss of his father. The court rejected State Farm's argument that the loss of consortium was subsumed within the wrongful death action. This ruling was particularly important for the child because there is strict 3 year statute of limitations for wrongful death actions and this period had already run by the time the claims were brought on behalf of the child.

The court further refused State Farm's arguments that the uninsured/underinsured coverage covered only bodily injury. The court stated that such restrictions on coverage would defeat the purposes of the act. The court stated, "The purpose of our uninsured motorist statute is to place insured persons in the same position they would be if the uninsured motorist had had insurance." Clearly, allowing exclusion of coverage in this case would put the child in a far worse position than if coverage was available from the other driver.

The court also pointed out the public policy of protecting and providing for the welfare of New Mexico children. The court addressed the great vulnerability of children who lose a parent and the need to support them. Allowing State Farm to evade the uninsured/underinsured coverage would hoist the responsibility for caring for the injured child on to society. Quoting Professor Prosser from the Restatement of Torts, the court revealed its disdain for the attempted evasion of responsibility, "it is not easy to understand and appreciate this reluctance to compensate the child who has been deprived of the care, companionship and education of his mother, or for that matter his father, through the defendant's negligence."

The Court's ruling suggests a public policy of construing attempted exclusions of uninsured/underinsured coverage against the insurance carrier. Uninsured/underinsured coverage is critical in a state such as New Mexico which suffers the highest rate of uninsured motorist in the nation. The lengths to which the court went to afford coverage for the injured child in this case is quite remarkable illustrating the court's embrace of a public policy that dictates a liberal construction of uninsured/underinsured motorist coverage for the protection of New Mexico's public.

Related Reading:
New Mexico Supreme Court Expands Scope of Law on Rejection of UM/UIM Coverage
Recovery of Punitive Damages Under Uninsured/Underinsured Motorists Coverage
Stacking Uninsured/Underinsured Motorist Coverage in New Mexico

Collins & Collins, P.C.
Albuquerque Attorneys

The law in New Mexico regarding the rejection of uninsured/underinsured motorist coverage seems to be turned on its head in the recent New Mexico Supreme Court case of Marckstadt v. Lockheed Martin, consolidated with the 10th Circuit Court of Appeals case of Federated Insurance v. Martinez.

The case involved the purchase automobile insurance for company vehicles. An employee was injured in an auto accident and made a claim against the uninsured/underinsured coverage on the policy. There was no written rejection of the coverage and the rejection was not attached to the policy. However, the employer indicated that it was understood that the coverage was waived. The Court made no indication that its opinion was fact specific. The case should raise concerns for every purchases of insured. I will not even begin to address the problems with the possible complicity between the insurance company and the employer who no doubt saved a few bucks in the denial of its employee's rightful recovery of damages for his injuries.

The law seemed to be well established requiring a written rejection of uninsured/underinsured motorist coverage under New Mexico law to be both signed by the insured and attached to the policy. The case of Arias v. Phoenix Indemnity issued just in July 2009 said as much. So it is surprising that Marckstadt would come so quickly on its heals setting aside what seemed to be both good law and sound public policy.

Instead Marckstadt takes the rather perplexing position that rejection of uninsured/underinsured motorist converge must be written but need neither be signed nor attached to the policy. The court then stated that there should be some evidence that the insured's rejection was "made part of the policy by endorsement, attachment, or some other means that calls the insured's attention to the fact that coverage has been waived."

What in the world does this mean? Can the language be hidden in small print? Can it be written on the hand of the insurance agent? Could it be whispered in the agent's office with failure to acknowledge taken as acquiescence? In fact, it means nothing other than the insurance companies will be allowed every possible avenue for denying coverage to unwary customers. It is just one more accommodation to the insurance industry who will used every advantage to avoid payment of claims to preserve profits.

In the past, I would usually end by saying that when faced with an accident that calls your uninsured/underinsured motorist coverage into question, you would be well advised to seek the advice of a New Mexico Attorney. As the law now stands, you would be well advised to seek that attention when reviewing the insurance policy coverage limits. As a practical matter, since it seems clear that the rejection could be hidden in the vast array of documents involved in the auto insurance policy process, and therefore will be hidden, you would be well advised to write on the face of the application that you are not rejecting uninsured/underinsured coverage which may be the only possible means of recovery for your injuries. Then have your friendly insurance agent initial the statement next to your own.

Related Reading:
New Mexico Laws on Rejection of Uninsured/Underinsured Motorist Coverage are Retroactive
New Mexico Supreme Court Expands Scope of Law on Rejection of UM/UIM Coverage
Notice Requirements in New Mexico Uninsured/Underinsured Motorist Cases

Collins & Collins, P.C.
Albuquerque Attorneys

Punitive damages are awarded in limited cases for the purposes of punishment of the defendant. Punitive damages also serve to deter similar such behavior by the defendant and others similarly situated. In New Mexico personal injury cases, punitive damages are awarded only when a defendant's behavior is found to be malicious, willful, reckless or wanton.

Many New Mexico personal injury claims assert a claim for punitive damages but the "malicious, willful, reckless or wanton" standard is pretty difficult to meet. In essence, the defendant's behavior must be pretty outrageous in nature to justify a punitive damages jury instruction from the court.

In auto accident cases, the question then arises whether insurance will cover the punitive damages awards. This question actually involves two separate elements. First, will the negligent driver's auto insurance liability limits cover a punitive damage award? Second, assuming that the negligent driver's insurance is inadequate to cover the total damages award, will the innocent driver's uninsured/underinsured motorist coverage cover any part of the punitive damages award? These same issues would arise in a pre-trial or pre-litigation settlement. On the other hand, it is a rare and generous insurance company on either side of the claim that would admit the propriety of punitive damages prior to litigation.

The answer to both questions is yes. Insurance coverage, both liability and uninsured/underinsured motorist coverage, provides coverage for punitive damage awards in a New Mexico auto accidents. The innocent injured driver is entitled to recover for all allowable damages under the New Mexico personal injury law.

The issue will generally not arise in the case of liability coverage since liability coverage in New Mexico auto accidents is generally grossly inadequate. New Mexico carries the highest percentage of uninsured drivers in the nation with many more severely underinsured. Thus, the liability coverage limits will typically not even cover the compensatory damages, much less the punitive damages.

Instead, the issue will more often arise when the innocent driver makes a claim on his or her uninsured/underinsured motorist policy. Some insurance companies will attempt to deny these legal claims. However, the law is clear and has been clear for quite some time since the 1991 New Mexico Supreme Court case of Stinbrink v. Farmers Insurance Company of America. The Court in Stinbrink made clear that uninsured/underinsured coverage does provide coverage for punitive damages.

Even here, however, policy limits often become an issue. New Mexico drivers typically carry inadequate liability limits to cover the harm that they do. Likewise, they generally carry woefully inadequate uninsured/underinsured coverage as well. As such, the findings in Stinbrink are purely academic in most cases as the insurance policy limits will always dictate the coverage in any particular auto accident case.

Insurance issues are confusing. The policies themselves typically provide very little illumination and may leave some even more confused after reading. Thus, it is important to consult with a New Mexico attorney to address the many coverage issues related to a New Mexico personal injury claim.

Related Reading:
Recovery Under Underinsured Motorist Coverage Not Constrained by Punitive Damage Exclusion of Underinsured Driver
Punitive Damages in New Mexico: What is Reasonable?
Caps on Punitive Damages: Great for Business, Bad for Everyone Else

Collins & Collins, P.C.
Albuquerque Attorneys