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.