Court Finds Car Insurance Company’s Policy Ambiguous and Finds in Favor of Injured Mother
In a recent case, a woman and her two children were injured in a car accident with another motorist. The woman filed a lawsuit against the other driver for their injuries. More than three years after the car accident, the woman amended her complaint to add a claim against her insurance company, since she believed that the other driver’s policy would not fully cover her damages.
The insurance company’s policy required claims to be filed within three years of the accident, so the insurance company argued that the claim was barred because it was filed after more than three years. The woman put the insurance company on notice about two years after the accident that she would likely pursue an underinsured motorist claim. Yet she did not file it until later, when she believed the other driver’s policy would be insufficient after pursuing the lawsuit against the driver.
In a recently released opinion, the state’s supreme court held that the claim was not barred. It explained that while the insurance company’s policy required lawsuits to be filed within three years, the insurance company also had a policy that it would only pay if the underinsured motorist’s insurance had been exhausted. Therefore, insured individuals were being told to file a lawsuit within three years, but at the same time they were being told not to file a lawsuit until other avenues were exhausted. The court explained that these two policies were in direct conflict with each other, and thus the policy was ambiguous. As a result, the court interpreted the terms in favor of the insured, allowing the case to continue against the insurance company.