Gov. Baldacci signs Maine law in effort to curb uninsured motorist claims following court ruling

Maine Gov. John Baldacci signed into law legislation that promises to curtail the number of uninsured motorist claims.

The new law will allow insurers to limit coverage for uninsured motorists to claims based on injuries sustained by insureds.

Drafted by the National Association of Mutual Insurance Companies, the measure is a legislative response to the case of Butterfield v. Norfolk & Dedham, in which a majority of the Maine Supreme Judicial Court held that a policy provision limiting coverage conflicted with the state’s UM statute. Under this holding, the father of a woman who was killed in an auto accident was able to recover under the uninsured motorist coverage of his policy, even though the policy limited UM coverage to bodily injury sustained by an insured, and the decedent did not quality as an insured under the policy because she did not live with her father.

Two justices dissented, arguing that the policy limitation represented a reasonable and legally permissible means for an insurer to control its exposure to risk.

The industry sought a correction last year, but trial lawyers challenged the initiative.

“Ultimately, lawmakers recognized the wisdom of the dissenters’ reasoning and saw that clarification of the UM statute’s intent is appropriate,” commented Paul Tetrault, NAMIC’s Northeast state affairs manager. “The change in the law recognizes what the dissenting judges recognized, that insurers have to be able to assess the exposure they take on when they write an insurance policy.”

Topics Legislation Claims