How Can Uninsured Motorist (“UM”) Coverage Be Waived in Georgia?

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An insurance company recently asked a Georgia federal court to rule on its motion to dismiss the case against it.

The case concerned Uninsured Motorist (“UM”) coverage. It arose from an auto accident in which the plaintiff was injured as he was riding in a vehicle owned and operated by the City of Waycross (the “City”) when it collided with an unknown driver.

Background and the Lawsuit

The plaintiff sought insurance benefits from the City’s insurance company, Travelers Indemnity Company. Travelers denied the claim because it alleged that his policy didn’t contain any Uninsured Motorist (“UM”) coverage.

Uninsured Motorist (“UM”) coverage is when there’s not enough insurance or there simply isn’t any insurance at all.  Another way said: it is the limits of liability insurance  exceed the tortfeasor’s policy limits.

A few months after Travelers denied the plaintiff’s claim for UM coverage, the plaintiff sued the unknown driver in Georgia State Court for Bacon County, seeking damages for his injuries.

Travelers sought a declaratory judgment stating that it had no obligation to indemnify the plaintiff for his uninsured motorist claims related to the suit against the unknown driver. The core question in the action was whether Travelers obtained a valid “rejection” of UM coverage. That question was critical because, without a written rejection of UM Coverage, Georgia law requires auto-liability policies to provide UM coverage under § 33-7-11(a)(1) and (3). If that argument failed., the insurer asked the court for reformation of the insurance policy to reflect the parties’ intent to exclude UM coverage due to mutual mistake.

The evidence showed that in April 2017,  Apex Insurance, a company that was acting on the City’s behalf, requested a policy quote from Travelers. City officials said that “[i]t was always the City’s intent to reject uninsured motorist coverage[.]” This indicated that the City had sought a policy without UM coverage in 2016-2017, as well. Travelers responded with a quote, including a grid classifying “Uninsured/Underinsured Motorist” coverage as “Rejected.” Apex accepted the policy proposal on behalf of the City and attached the proposal to the email.

The Judge’s Opinion

U.S. District Court Judge Lisa Godbey Wood explained in her opinion that Georgia law generally requires auto insurance policies to provide uninsured motorist coverage, pursuant to Georgia State Statute § 33-7-11(a)(1). However, that coverage can be waived if the insured rejects the coverage in writing.

That last part—the writing requirement—is the issue in this case. Travelers argued that Apex’s email asking it to bind coverage satisfied the writing requirement. They pointed out that the email expressly requested coverage “per the dated proposal of 6/23/2017.” But the plaintiff disagreed. He Pallotta acknowledged an email could potentially satisfy the writing requirement but insisted that the email exchange was insufficient.  As he saw it, the City didn’t reject UM coverage “in writing” because the email itself didn’t have an explicit rejection of, or even direct reference to, UM coverage. But Judge Wood noted that the statute says that the rejection must be “in writing”… but not a particular form of writing or even a single writing.

The judge’s analysis started with two obvious facts: (i) the policy proposal clearly showed that UM coverage was “rejected”; and (ii) both the email and the proposed policy were “in writing.”

Judge Wood explained that “[t]hose undisputed facts do most of the work here…” That was because the Georgia Court of Appeals held in 1969 that “[t]he rejection of uninsured motorist coverage in a written application” for insurance, at least when it is signed by the party seeking insurance, “is sufficient to comply with [the writing requirement.]”

Moreover, the judge said that the federal district court has come to the same conclusion even where the writing is a mere proposal, as opposed to an actual application. As a result, since the policy proposal here clearly “reject[s]” UM coverage, it would suffice to reject coverage if the City (through its agent) had signed and returned it to Travelers.

The email asking Travelers to bind coverage under the agreement serves essentially the same function, Judge Wood held. Like a signature on the proposal itself, the email confirmation was made for the purpose of inducing Travelers to issue a policy. “What policy was Travelers supposed to issue?” the judge asked. The one attached to the email confirming coverage, with “[a]ll [t]erms and [c]onditions per the dated proposal of 6/23/2017.” There was no dispute that this policy “rejected” UM coverage, so the only sound conclusion is that “the email—like the signature on an application for insurance—confirmed the City’s choice to ‘reject the coverage in writing.’”

Therefore, the writing requirement was satisfied by the email confirming a coverage request under a written proposal that clearly rejects UM coverage. As such, the court held that because Travelers obtained a written rejection of UM coverage, its motion for summary judgment was is granted, and the case was dismissed. Travelers Indem. Co. v. Pallotta, 2021 U.S. Dist. LEXIS 234010 *; 2021 WL 5826122 (S.D. Ga. December 7, 2021).

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