Phone Call With Insurer Does Not Void Insured’s Prior Rejection of Coverage

By | August 8, 2022
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A motorcycle driver’s signed waiver of underinsured motorists coverage in 2004 was still in effect 15 years later when he was in a tragic crash despite a phone conversation he had in 2014 with a representative for his direct insurer about his policy.

Excerpts from the Phone Conversation In support of his case, Bryan Koch presented evidence of the telephone conversation he had with a representative of Progressive Direct, on or about August 20, 2014, nine months before his tragic accident, during which he sought to purchase additional coverage for his 2013 Harley Davidson motorcycle. According to the court, the relevant portions of that conversation were as follows: [Koch:] uh, I just had a, a friend who was in a bad accident years ago, and he told me, you know, a lot of times on the coverage you’ve got basic coverage, but it doesn’t really cover a whole lot in terms of hospital, and maybe other things. What, uh, even at the 1,500 where I’m at, what, are there things I should be adding to that policy to, uh, not just to insure the bike, but if you were ever hospitalized for an extended period of time, things like that? [Progressive Direct representative:] Definitely. So, um, I’m not licensed in the state of Pennsylvania, but I can kinda go over what coverages that we offer in your state. The conversation continued on to include the following discussion: [Progressive Direct representative:] You also don’t have uninsured motorist coverage. That’s for if, you know, if somebody else causes an accident, and injures you or your bike, they would pay for all your injuries and damages. But if they are not responsible and they don’t have insurance, then you … [Koch:] You’re stuck. [Progressive Direct representative:] … you’re stuck with, um, everything on your own. Unless you have the uninsured motorist coverage here. [Koch:] M’kay. [Progressive Direct representative:] So you do have that option. So it’s like you’re kinda paying for somebody else not to be responsible. [Koch:] Yeah. [Progressive Direct representative:] But you’re protecting yourself. [Koch:] Yeah.
At the conclusion of this conversation, Koch added uninsured motorist (UM) coverage to his policy in the amount of $100,000 each person and $300,000 per accident. The Progressive Direct representative never discussed the availability of underinsured motorist (UIM) coverage.

At the conclusion of the phone conversation, the insured added uninsured motorist (UM) coverage to his Progressive Direct Insurance motorcycle policy but the insurer representative never discussed the availability of underinsured motorist (UIM) coverage.

A Pennsylvania Superior Court has decided that the phone conversation did not alter the fact that the insured had previously signed a form rejecting UIM coverage. It reversed a trial court that had found that the phone conversation was sufficient to trigger Progressive Direct’s statutory obligation in the state to offer the insured both UIM and UI coverages and obtain a new affirmative rejection of UIM coverage.

According to the Superior Court, there is a presumption that the insured was advised of the benefits and limits available under his policy at the time of his original application for coverage in 2004. Thus, when he contacted Progressive Direct in 2014 and indicated that he wished to obtain more coverage on the existing policy, the Progressive Direct representative was not required to give him additional notice of a particular benefit or to obtain another UIM rejection form.

The Accident

The state’s motor vehicle law requires insurers to offer uninsured and underinsured motorist coverage. Insureds must sign and date separate forms to reject UI and UIM coverage.

On June 7, 2015, Bryan Koch was driving his 2013 Harley Davidson motorcycle while his wife was riding with him as a passenger. Their motorcycle was struck by a 1997 Ford Explorer driven by a driver who was later determined to be driving under the influence of alcohol. Koch’s wife was killed and Koch suffered injuries that required the amputation of his left leg above his knee. The parties do not dispute that the Ford Explorer driver, who was underinsured, was solely at fault for causing the accident.

Koch filed a breach of contract action asserting that Progressive Direct had breached the insurance policy by failing to properly and timely evaluate the claim and pay the UIM benefits.

Koch prevailed before the trial court which found that when he contacted Progressive Direct and sought more information about obtaining additional coverage, Koch made it “obvious” that he no longer wanted to reject the coverage that he had previously declined. Koch alleges that, had the Progressive Direct representative discussed the differences between UI and UIM coverage, he would have purchased both UI and UIM coverage

Progressive asserted that the original UIM rejection form Koch signed in 2004 remained valid at the time of the accident. The insurer presented evidence that it had consistently sent Koch policy renewals which stated that Koch had rejected UIM coverage.

After Koch had purchased uninsured motorist coverage insurance in 2014, Progressive sent Koch a policy renewal on January 3, 2015, which stated that the policy now included uninsured motorist coverage. This policy renewal listed the underinsured motorist bodily injury coverage as “rejected.”

The Superior Court rejected the argument that the conversation in 2014 created a duty or a legal obligation for the insurer representative to offer Koch UIM coverage, notify him about UIM coverage, or to obtain a new UIM rejection form where this coverage had been previously waived in a valid rejection form.

Topics Carriers

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Latest Comments

  • August 10, 2022 at 12:51 pm
    Allan says:
    I certainly hope this case is appealed. Not only was there a moral obligation, the Agent shouldn't have given advice on coverage in a state they weren't licensed in. This is a... read more
  • August 9, 2022 at 9:22 am
    Christy says:
    I read & re-read the telephone conversation. The Progressive call center person wasn't licensed in PA, therefore didn't know all coverages available. He/She stated about... read more
  • August 8, 2022 at 4:24 pm
    Robin says:
    The call center employee stated - not licensed in Pennsylvania.... it appears to be an issue with both the insured and the call center employee as far as the phone conver... read more

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