When someone is involved in an accident, they have a claim against the at fault driver. The at fault driver must pay damages to the people they hurt due to their negligence.
Sometimes at fault drivers don’t have insurance. Other times, they have insurance but it is inadequate to cover the entire loss. That is when uninsured and under-insured motorist coverage kicks in. It makes up the shortfall. It gives benefits to people injured in auto accidents when the liability insurance is non-existent or insufficient.
We’ve had several insurance companies tell our clients that our clients don’t have uninsured or under-insured motorist coverage. If this happens before an accident, no big deal. The client can simply go out and get new insurance. If it happens after an accident it can be devastating. The client believed she had insurance coverage only to find out she didn’t.
We’ve had several cases where the insurance company is dead wrong. The insurance company says there is no insurance, but we end proving in the end that the insurance company is legally obligated to provide insurance coverage.
How can this happen?
Utah law requires insurance companies to include uninsured motorist coverage and under-insured motorist coverage in all insurance policies. Utah Code Annotated § 31A-22-305.3(2)(g)(ii) allows the insured (the customer) to waive the coverage. In order for the waiver to be valid:
- The insurance company must give to its customer a reasonable explanation of what the customer is giving up by waiving the coverage;
- The explanation must be given in writing before the insurance is purchased; and
- The customer must sign the waiver.
If those three requirements are not met, the customer has insurance.
We’ve seen insurance companies deny coverage even when they have no waiver. More often than not, they have a waiver but it fails to comply with requirement number 1. They don’t give the customer an explanation of what is being waived. When the insurance company fails to follow the law, the waiver is invalid and the company must provide coverage, even if the customer did not pay for it.
In our experience, most waivers are invalid. The insurance customer actually has coverage.