Can a UM/UIM Claim Be Denied in Alabama?

An uninsured/underinsured motorist (UM/UIM) carrier may deny a UM/UIM claim for several legitimate reasons. They may also deny your UM/UIM claim for reasons that lack merit. At Martin & Helms, P.C., our lawyers will explain if the denial is legitimate or is just an attempt by the insurance company to get out of paying the damages you deserve. If the denial is not legitimate, we have the experience and resources to assert your right to have the insurance company honor the terms of their insurance policy.

Reasons a UM/UIM claim may be denied

An insurance company can legally deny your claim:

• If the owner of the vehicle who is claiming UM/UIM coverage for himself/herself or a household member did not purchase any liability insurance. You can’t have UM/UIM insurance without having liability insurance.
• If the owner of the vehicle who is claiming UM/UIM coverage for himself/herself or a household member purchased liability insurance but did not purchase UM/UIM insurance. The liability insurance carrier is required to offer UM/UIM insurance in the same amount as the liability insurance. The owner of the vehicle can accept or reject the offer. If the owner of the vehicle accepts the UM/UIM coverage, the owner must agree to the UM/UIM coverage in writing and pay the appropriate premiums.
• The accident victim is not eligible. Generally, UM/UIM insurance covers named insureds and anyone who lives in the household of the named insureds. If the accident victim is not a named insured or doesn’t live in the same household, then that victim may not be covered by the owner’s UM/UIM policy. The victim may be covered by another UM/UIM policy.
  • For example, let’s assume John Smith owns a car and buys liability and UM/UIM coverage. John takes his son Michael for a ride. Michael brings along his friend Susan, a younger neighbor from down the street. If there is an accident, John and Michael can file a UM/UIM claim through John’s UM/UIM policy. Susan cannot file a claim through John’s UM/UIM policy. Susan may be able to file a UM/UIM claim through the UM/UIM policy on the vehicle her parents own.
• The defendant isn’t liable for the accident. Let’s assume John Smith is involved in an accident with Fred Jones. If Fred Jones caused the accident and didn’t have insurance or didn’t have enough insurance to pay for John’s injuries, John could file a UM/UIM claim through his own policy. However, if John caused the accident, John cannot recover damages from Fred’s liability insurance policy or from John’s UM/UIM policy, because Fred is not liable for the accident.

What if I didn’t reject my UM/UIM coverage in writing?

If it’s not in writing, then you didn’t legally, contractually reject UM/UIM insurance – which means you should technically have it. And it’s worth noting that every named insured has to reject the coverage, not just you.

What we mean is, let’s say you and your spouse are both named on a policy. Your spouse decides, “Nah – we don’t need this coverage” and signs the paper, but you never sign. If you’re in an accident and need to make a UM/UIM claim, you can – but your spouse can’t.

Conversely, let’s say you’re the one with a policy and you’ve rejected UM/UIM coverage. You get married and add your spouse to the policy. Your insurance company needs to get your spouse’s rejection in writing, too – but it is possible that your initial rejection of the policy may cover any additional insureds (AKA, your spouse) you add. See Progressive Specialty Insurance Company v. The Estate of Jack William Mock et al (MAG+) (M.D. Ala. 2018).

Reasons a UM/UIM claim cannot be denied

Normally, the case against the responsible driver will proceed before the UM/UIM claim is filed. Once the liability of the responsible driver is established, any car accident victims who have a valid UM/UIM claim will then proceed with their UM/UIM claim if the responsible driver did not have insurance or did not have enough insurance. But there are some important procedural steps you must take BEFORE settling the liability claim in order to pursue a UM/UIM claim. If you fail to take these steps you are at risk of inadvertently waiving your right to make a UM/UIM claim.

Insurance companies have a duty to bargain in good faith. They can’t deny valid claims just to try to force you to accept a bad settlement. The UM/UIM carrier cannot argue that the responsible driver wasn’t liable when it’s clear he/she was liable. The UM/UIM carrier also cannot refuse to pay damages that are clearly due. For example, if a driver ran a red light, struck your car, you broke your leg, and you couldn’t work for six months; the insurance company generally can’t try to argue you were liable, that you didn’t break your leg, or that you could have worked – when it’s clear that you couldn’t work.

The UM/UIM carrier may attempt to deny your claim based on an argument about who is responsible for the accident and the extent of your damages. When the UM/UIM carrier does contest your claim, our seasoned trial lawyers then file a claim against the UM/UIM carrier. If the claim does not settle out of court, we do seek to have a judge and/or jury determine who was responsible, the amount of your damages, and the amount the UM/UIM carriers should pay.

At Martin & Helms, P.C., our UM/UIM vehicle accident lawyers in Huntsville and Decatur understand how to file insurance claims and how to respond when insurance companies deny your claims. We’ll explain your rights and guide you through the claims process. Many cases that are filed against the UM/UIM carrier do settle because liability is clear, your damages are often more than the combined policy limits of the driver’s liability insurance (if they only have the Alabama state minimum), and the UM/UIM carrier’s policy limits. When insurance companies deny claims, we are ready to try your claim in court.

To discuss your rights after any type of vehicle accident, please call us or complete our contact form to schedule a free consultation. Our lawyers have offices in Huntsville and Decatur, and serve clients in Madison, Athens, and North Alabama.