Umbrella Insurance Policies in Maine and Underinsured At-Fault Drivers

In most states, including Maine, uninsured motorist coverage is
mandatory. Uninsured motorist coverage is an exception to the basic idea
in insurance and tort law that an injured person’s damages should be
paid by or on behalf of the at-fault party. In Maine, the amount of
uninsured motorist coverage that must be provided depends on the
applicability of the Maine Automobile Insurance Cancellation Control
Act. Any policy subject to this law must provide coverage that is no
less than the amount of liability coverage offered to the purchaser,
unless the purchaser rejects that amount.The amount of uninsured
motorist coverage cannot be less than the minimum limits for bodily
injury liability insurance. If a policy is not subject to the law,
uninsured motorist coverage is required only in accordance with
statutory minimums.

In the recent Maine Supreme Court case Dickau v. Vermont Mutual Insurance Company,the
plaintiff had been struck by an under-insured driver while riding his
motorcycle. The plaintiff argued that either he was entitled to
uninsured motorist coverage pursuant to an umbrella policy with his
insurance company, based on the policy’s language or by operation of
law.

The plaintiff suffered more than $250,000 in damages, but the
defendant’s insurance policy only provided $100,000 in liability
insurance coverage. The plaintiff, on the other hand, was covered by two
insurance policies. A Dairyland Insurance Company policy insured the
plaintiff’s motorcycle and offered $250,000 in uninsured motorist
coverage. An umbrella policy offered liability coverage in excess of
minimum primary insurance for up to $1 million per occurrence.

The plaintiff settled with the defendant for her policy limit of
$100,000 and settled his claim for uninsured motorist benefits with
Dairyland for $150,000, which represented the maximum amount of coverage
minus the $100,000 from the defendant’s insurance. The plaintiff then
sought a judgment that his umbrella policy provided uninsured motorist
coverage, or that the policy was required by law to provide $1 million
in uninsured motorist coverage, offset by his other settlements.

Both parties moved for summary judgment. The umbrella policy
insurer’s motion was granted, while the plaintiff’s motion was denied.
The plaintiff’s appeal asked the court to consider whether the uninsured
motorist statute’s requirements applied to umbrella policies. The court
explained that an umbrella policy is one of two types of excess
insurance coverage. One is a “true excess” policy, which extends the
policy limit for an underlying policy covering the same losses. The kind
of umbrella policy that the plaintiff had, however, offered coverage
over more than one primary policy for varying types of losses. The
plaintiff was required to maintain a primary policy; the umbrella policy
would kick in only when that primary policy had been exhausted.

The court explained it was possible for an umbrella policy to include
uninsured motorist coverage, if the parties agreed. The policy language
in this case, stated that it was a personal umbrella liability policy
with a $1 million limit, but it also specified that it covered the
policy holder’s legal liability for claims made against him by somebody
else, but it did not cover damages to the policy holder’s own property,
car, or house. The policy required the insured to carry uninsured
motorist coverage of at least $250,000 per person and $500,000 per
accident for physical injuries. It expressly excluded any claim for
uninsured motorist coverage as defined in a primary policy.

The Court held that the unambiguous language of the policy did not
support the plaintiff’s interpretation of the agreement. Moreover, it
held that Maine’s uninsured motorist statute includes no requirement
that an umbrella policy provide uninsured motorist coverage.

The Court concluded that even though Maine is a “full-recovery”
state, there is no express requirement that somebody carry umbrella or
any other type of excess coverage. The Court reasoned that it would be
illogical to hold that uninsured motorist coverage is mandatory on a
voluntary form of insurance. The judgment was affirmed.

If you are hurt in a crash with an underinsured driver, you should consult a Maine car accident attorney. At Briggs & Wholey, our knowledgeable attorneys are available to answer any questions you may have. To schedule a free consultation with an experienced advocate, contact Briggs & Wholey, LLC at (888) 596-1099 or through our website today.