North v. Selective Ins. Co. of South Carolina, 2020 WL 5542571 (Ind. Ct. App. 2020)
After an automobile accident, Shannon sustained serious and permanent injuries. She was the daughter-in-law of a named insured (James) of an auto policy with Selective and living in James’ home at the time of her accident. After receiving the insurance limits from the other driver’s auto liability policy and James’ primary underinsured motorist (“UIM”) policy, Shannon sought to recover additional UIM coverage from James’ umbrella policy with Selective.
The Selective umbrella policy did not list coverage or premium assessed for UIM coverage. The declaration pages further indicated the word “rejected” under the section for UIM coverage. Furthermore, the policy contained an explicit exclusion for UIM coverage unless the policy contained an endorsement that specifically provided such coverage.
Despite all evidence indicating that the umbrella policy provided no UIM coverage, Shannon argued that the policy’s reference to that coverage being “rejected” meant that Selective had to obtain a written rejection from James in accordance with I.C. § 27-7-5-2(a-b). This statute requires insurers to offer UM/UIM coverage to its insureds in the policy’s acquisition, and if such coverage is rejected, the insurer must obtain a written rejection from the insured of the UM/UIM coverage. Because Selective did not obtain a written rejection from James, Shannon argued that Selective’s umbrella policy was required to provide UIM coverage with a limit matching the limit of liability coverage.
The trial court granted summary judgment to Selective, which was affirmed on appeal. In rejecting Shannon’s argument that written rejection of UIM coverage was required to apply to the Selective umbrella policy, the Court of Appeals referred to I.C. § 27-7-5-2(h), which states that an insurer is “not required to make available” UIM coverage when issuing an umbrella policy. The Court of Appeals noted, “an insurer issuing a personal umbrella policy is not required to include UM/UIM coverage. Although not required to, an insurer may offer UM/UIM coverage as part of a personal umbrella policy and, if so offered, an insured may purchase it, if desired.”
This case involves a straightforward reading of Indiana’s UM/UIM statute. Because Selective had no duty to offer UM/UIM coverage to James when he acquired the umbrella policy, and James did not ask for that coverage, it necessarily followed that Selective had no duty to obtain a written rejection from him.