If you have uninsured/underinsured motorist (UIM) coverage as part of your insurance policy, are you always entitled to receive its benefits? The complaint for this class action alleges that USAA Casualty Insurance Company offers UIM coverage that is essentially illusory and/or misleading, because USAA offsets the amount by the amount of the underinsured motorist’s coverage.
One of the plaintiffs in this case, Cindy Marrs, was insured by USAA, with UIM coverage of $25,000 per person, $50,000 per accident. Marrs was injured in an accident on May 24, 2019. She was not deemed at fault in the accident, the complaint alleges, since the other driver (called “the tortfeasor” in the complaint) ran a traffic signal at a high rate of speed. She suffered total damages of more than $50,000.
After the accident, Marrs made a claim against the other driver’s insurance, the complaint alleges, and received $25,000, the total amount of the other driver’s liability coverage. Since that did not nearly cover her damages, she expected to receive another $25,000 from her own USAA. But the complaint says that USAA denied her claim.
The complaint alleges, “USAA denied Marrs’ claim because (i) USAA deducted from the coverage it owed Marrs any sums paid by the tortfeasor’s insurer and (ii) the tortfeasor’s liability coverage limits equaled Marrs’ underinsured motorist coverage limits.”
Marrs had been paying premiums for an insurance policy that included UIM coverage, and the complaint claims she “had a reasonable expectation” that she would receive those benefits in case of an accident with an underinsured motorist. But the complaint claims that, in reality, “under her policy there were virtually no underinsured motorist benefits.”
The complaint alleges, “Nothing in USAA’s boilerplate forms advise an insured that they will never receive the full amount of underinsured motorist coverage for which they have contracted.”
The complaint quotes the findings of an earlier court case, known as Schmick v. State Farm Mutual Automobile Insurance Company, 704 P.2d 1092 (1985), about just such a situation: “We conclude that this type of policy is illusory in that it may mislead minimum UM/UIM policyholders to believe that they will receive underinsured motorist benefits, when in reality they may never receive such a benefit.”
The class for this action is all persons (and their heirs, executors, administrators, successors, and assigns) from whom USAA collected a premium for an underinsured motorist coverage on a policy that was issued or renewed in New Mexico by USAA and that purported to provide underinsured motorist coverage on the face of its application and declaration pages, but which effectively provided no underinsured motorist coverage and/or misleading underinsured coverage, reflected on USAA’s declarations page, because of the statutory offset recognized in the Schmick case cited above.
Article Type: LawsuitTopic: Insurance
Most Recent Case Event
USAA Casualty Offset for UIM Coverage New Mexico Complaint
June 1, 2022
If you have uninsured/underinsured motorist (UIM) coverage as part of your insurance policy, are you always entitled to receive its benefits? The complaint for this class action alleges that USAA Casualty Insurance Company offers UIM coverage that is essentially illusory and/or misleading, because USAA offsets the amount by the amount of the underinsured motorist’s coverage.
USAA Casualty Offset for UIM Coverage New Mexico ComplaintCase Event History
USAA Casualty Offset for UIM Coverage New Mexico Complaint
June 1, 2022
If you have uninsured/underinsured motorist (UIM) coverage as part of your insurance policy, are you always entitled to receive its benefits? The complaint for this class action alleges that USAA Casualty Insurance Company offers UIM coverage that is essentially illusory and/or misleading, because USAA offsets the amount by the amount of the underinsured motorist’s coverage.
USAA Casualty Offset for UIM Coverage New Mexico Complaint