Recently, the Louisiana First Circuit Court of Appeal addressed whether a renewal of an insurance policy, and the addition of two subsidiaries, affected the rejection of uninsured/underinsured motorist coverage. Louisiana law states that a renewed insurance policy, when issued to the same named insured, does not require completing new uninsured motorist selection forms. The rationale is that a renewal of an insurance policy does not create a new policy, and therefore it does not require the completion of new uninsured motorist selection form s. An exception exists when liability limits change.
In the case before the court, the plaintiff, Chris Loudermilk, alleged that since an insurance policy added two additional insureds upon renewal, the uninsured/underinsured motorist coverage was invalid. Mr. Loudermilk was driving a motor vehicle owned by his employer, Environmental Safety and Health Consulting Services, Inc. (ES&H), when he was injured in an automobile accident. He brought claims against the other drivers involved in the accident and their insurers. Mr. Loudermilk also sued XL Specialty Insurance Coverage, his employer’s insurer. He alleged that the insurance coverage under XL included uninsured/underinsured motorist coverage.
The automobile policy for ES&H was executed by the legal representative for the company and issued by XL Insurance. The policy named other corporations and LLCs that were owned and managed by the same individuals as ES&H. When acquiring the insurance policy, the legal representative executed a valid Uninsured Motorist Bodily Injury Coverage Form. This form rejected uninsured/underinsured motorist coverage completely.
Prior to the motor vehicle accident, ES&H renewed their automobile insurance policy and added two entities to the named insured, both of which were owned by Boucvalt Services, LLC. This renewal did not change the policy limits.
XL Insurance filed a summary judgment motion on the grounds that UM coverage did not exist for Mr. Loudermilk’s claim because ES&H had expressly rejected any UM coverage by executing their valid rejection of UM coverage. In response, Mr. Loudermilk asserted that the XL policy was not issued to the “named insured” according to Louisiana law, and therefore the UM rejection was not valid. The trial court granted XL’s motion for summary judgment and dismissed Mr. Loudermilk’s claims against XL. Mr. Loudermilk appealed.
On review, the court stated the sole issue was whether ES&H’s rejection of uninsured/underinsured motorist coverage was valid when the policy was renewed and two additional entities were added to the named insured endorsement on the policy.
Turning to Louisiana law governing the issuance of uninsured motorist coverage, the court stated that the language of the applicable statute makes clear that when an insured rejects UM coverage, that rejection remains valid for the life of the insurance policy. Changes to an existing policy, even if they create new coverage, do not create a new policy, except for changes in the liability limits. There is no requirement that the insured complete a new uninsured motorist selection form. Here, the liability limits of the original policy and the renewal remained unchanged.
Mr. Loudermilk contended that the UM rejection was not valid because two entities were added to the named insured endorsement when the policy was renewed. He cited caselaw in support of his argument that a UM selection is valid through renewal when the named insured remains the same. But the court stated that Mr. Loudermilk was driving a vehicle owned by ES&H, not by one of the subsidiaries that had been added to the renewal policy. Unlike the case cited by Mr. Loudermilk, ES&H remained the policyholder and named insured in this situation when it renewed its insurance policy.
The court affirmed the trial court’s decision granting summary judgment in favor of XL Specialty Insurance Company, and it dismissed Mr. Loudermilk’s claims against XL.
The insurance attorneys at Lavis Law represent Louisiana residents in their claims against insurance companies. Our office provides a free consultation and can be reached by calling 866-558-9151 or using our online form.
More Blog Posts:
Louisiana Court Affirms Judgment in Favor of Car Accident Victim Receiving Maximum Coverage From Insurance Company, Louisiana Insurance Lawyer Blog, November 24, 2015
Louisiana Appeals Court Holds Plaintiff Has Burden of Proving His Entitlement to Recovery Under Uninsured Motorist Coverage, Louisiana Insurance Lawyer Blog, August 25, 2015