Delaware Court Changes Underinsured Limits in Case of Hurt Motorcyclist

September 30, 2009

A Delaware Superior Court has ruled that Progressive Insurance Co. must provide $15,000 in uninsured/underinsured motorist (UM) coverage to a severely injured motorcyclist who sued the insurer after learning he had none.

The policyholder, Mark Banaszak, has sough to reform the policy after being injured by a driver and exhausting the other driver’s UM limits in medical claims. Banaszak’s medical bills were over $100,000, but Banaszak claimed that he been lead to believe that his UM coverage would pay up to $100,000 in the event of an accident, and that Progressive had failed to make a meaningful offer of additional underinsured motorist coverage. He had sought to have Progressive pay the $100,000 limit.

A key issue in the ruling was whether the policy documents and interaction with Progressive sales staff sufficiently made clear the amount and nature of the UM coverage, and whether the insurer met its legal duty to offer increased coverage limits.

Superior Court Judge Peggy Abelman upheld parts of Banaszak’s and Progressive’s legal motions, ultimately finding that, although Banaszak rejected the $100,000 in coverage, Progressive’s policy documents would mislead a reasonable person into believing the policy included a statutory minimum UM coverage of $15,000 per person.

Abelman ordered the policy reformed to reflect that coverage.

“(N)either the telephonic conversation… with a Progressive agent, nor the pre-checked form already completed by the insurer, nor, most importantly, the language of the explanatory documentation provided to (Banaszak), adequately fulfilled Progressive’s duty of good faith,” Abelman wrote in her opinion.

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