Uninsured and Underinsured Motorists Insurance in Washington State

By Richard H. Adler, Attorney at Law

Washington state statutory laws require insurers doing business in Washington offer Uninsured Motorist insurance (UM) and Underinsured Motorist insurance (UIM) to persons purchasing liability automobile insurance. Uninsured Motorist insurance provides compensation to the insured when he/she is injured by another driver who is without any automobile liability insurance. Underinsured Motorists coverage provides compensation when the insured is injured by another driver whose liability insurance coverage is insufficient to fully compensate the injured person. UM and UIM are typically contained in the same section of an automobile insurance policy and the premium paid is for both UM and UIM coverages.

The legislative purpose behind the UM/UIM statute was to ensure the availability of a source of recovery for personal injuries following an auto accident when the responsible party did not provide adequate protection. Britton vs. Safeco, 104 Wn.2nd 518, 531, 707, P2d 125 (1985) and Elovich v. Nationwide Ins. Co., 104 Wn.2d 543, 707 P.2d 1319 (1985). The statutory scheme surrounding UM and UIM coverage requires all Washington state auto insurers to:

Offer UM/UIM coverage to Washington state policy holders.
Offer UM/UIM coverage in the same amount as the liability insurance purchase.
Washington State laws require all drivers to carry motor vehicle liability insurance coverage of not less than $25,000.00. The UM/UIM laws require the insurer offer UM/UIM coverage in an amount not less than $25,000.00. If the insured is purchasing a higher amount of liability insurance than the statutory minimum of $25,000.00, the insurance company must offer their insured UM/UIM with limits of the same amount no matter how much that is.

WAIVERS

Though UM/UIM coverage must be “offered” to an insured, he/she can chose to refuse or waive the coverage entirely, or to purchase an amount less than the liability coverage. If they chose do so however, Washington law requires the insurance company obtain a written waiver of coverage signed by the insured attesting to that decision. RCW 48.22.030 (4). Of note, if the written waiver has not have been signed by the insurer or the insurance company cannot produce a copy of the waiver it claims was signed by the insured, the insurance company is required to retroactively extend UM/UIM coverage in the same amount as the casualty liability coverage at the time of the motor vehicle accident. Clements v. Travelers Indemnity Company, 121 Wn.2d 243, 850 P.2d 1298 (1993). In Clements, the Court made a number of points of interest: > UIM coverage is mandatory unless the insured makes a valid written rejection.
The UM/UIM statute reflects the legislative intent “to place upon the insurer the burden of obtaining a knowing written rejection in order to avoid the statutory requirement for UIM coverage”.
The waiver or rejection of UM/UIM coverage must demonstrate an affirmative and conscious act on the part of the insured.
UIM coverage becomes a part of every automobile liability policy by operation of law unless the insured validly waives coverage.

ADVERSARIAL NATURE OF UM/UIM

Most people think when they purchase automobile insurance their insurance company will be on their side when the need arises. After all, isn’t that what insurance is about? Slogans such as “You’re is Good Hands,” “Like a Good Neighbor,” “Fast, Fair and Friendly,” reinforce this thinking. These marketing slogans arise from a legally recognized fiduciary-type relationship between the insured and insurer, especially in the context of Personal Injury Protection (PIP) or Collision coverage. This relationship, however, does not transfer into the UM or UIM claim processes, even though the insurer and insured remain the same. When an insured presents a UM or UIM claim, the rights and duties of the insurer change. Now the insurer “stands in the shoes” of the at fault uninsured or underinsured driver whose negligence caused the injuries and damages. This means the insured’s own insurance company now has interests in opposition to those of the policy holder and the process becomes adversarial.

The change in the relationship between the injured person and their insurance company from one of looking after their interests in obtaining care in the PIP context, to being opposed to their interests and seeking to minimize recovery in the UM/UIM context was discussed by the Washington State Supreme Court in 2001 in the Ellwein case. The Supreme Court reviewed a UM/UIM appeal involving an insured who had been injured in a motor vehicle collision who had subsequently sued her own insurance company, The Hartford Company, alleging they had acted in “bad faith” in how they handled her UIM claim. The evidence showed her own automobile insurance company made unreasonable settlement offers, hired an expert witness to testify against her who had already been retained by the at fault party’s insurer, refused to share information regarding the accident within their control with her, etc. The Supreme Court ruled in the context of the UM/UIM claim, the relationship between the insurance company and it’s own insured was “by nature adversarial and at arm’s length,” and that the insurer needs to “be free to be adversarial within the confines of the normal rules procedure and ethics.” Ellwein vs. Hartford Company, 142 Wn.2nd 766 (2001)

PRACTICE APPLICATION

It is not uncommon for those injured in auto accidents to find themselves injured by a driver who has no liability insurance or just the Washington state mandatory minimum limits of $25,000. If you waive your UM/UIM coverage or insure yourself at a low level, there is a risk you will be without adequate resources to protect yourself and your family if a traumatic injury in a motor vehicle accident happens. It is worthwhile to spend the few extra dollars required to carry UM/UIM coverage and to have limits of more than the minimum.
UM/UIM claims are complex with many legal loopholes for insurance companies to use to deny and limit coverage. If you are injured in a motor vehicle collision seeking the advice of an experienced personal injury attorney who works with automobile and insurance law is always a good idea. Adler Giersch ps offers such consultations with our personal injury recovery attorneys at no cost or obligation to the injured person through their offices in Seattle, Everett, Bellevue and Kent.