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Insured or Underinsured?  That Is The Question

January 24, 2018

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A Pennsylvania Court recently ruled that a plaintiff-insured was not entitled to UIM coverage since the tortfeasor-driver was not underinsured for purposes of UIM coverage.  In <a href=""><em>Tenbus v. Progressive</em></a>, the plaintiff-insured was involved in a motor vehicle accident.  At the time of the accident, the other driver had insurance coverage totaling $125,000.  The plaintiff-insured also was insured under her own policy, which included UIM benefits.
The plaintiff-insured subsequently sued the other driver, and the case proceeded to arbitration.  An arbitration award was entered for $125,000, i.e. the amount of the other driver’s insurance coverage.  The plaintiff-insured then attempted to seek UIM benefits from her own insurance policy.  The defendant-insurer countered that there was no UIM coverage available under the policy, as the other driver was not underinsured as that term was defined by the policy or relevant case law.  Specifically, the defendant-insurer argued that the other driver could not be deemed underinsured, since the coverage provided under the other driver’s policy was the exact amount of the plaintiff’s damages / arbitration award.  In response to this argument, the plaintiff-insured attempted to establish that the other driver was underinsured by introducing new evidence of future damages, including future medical expenses.  The court disagreed with the plaintiff-insured’s position.  Ultimately, the court concluded that since the plaintiff-insured had not raised claims for future damages during the arbitration, (which she was entitled to do), her failure to do so collaterally estopped her from pressing this argument in her subsequent litigation for UIM benefits.  Therefore, the court concluded she was not entitled to UIM benefits under her policy, as the other driver was not underinsured.
Consequently, this case offers support for the contention that an insured may not be entitled to recover UIM benefits in a subsequent litigation, if the insured failed to establish that her damages exceeded the tortfeasor’s insurance coverage limits – demonstrating that the other driver was, in fact, underinsured.
Thanks to Colleen Hayes for her contribution to this post.

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