clock ticking on uninsured motorist claims

The Colorado Court of Appeals recently reviewed the time limits given to a personal injury victim to file an underinsured motorist claim, and its ruling gave clear direction to plaintiffs whose settlement time is running out: Act before it is too late.

Colorado Uninsured Motorist Law

Section 13-80-107.5(1)(b) of Colorado law provides for a three-year statute of limitations to file an underinsured motorist claim. However, if an action is commenced against the underinsured motorist or if a payment is made for the underlying bodily injury claim within three years, then the underinsured claim can be filed up to two years after the insured received the payment. The statute offers these extra two years so people have time to file the underinsured motorist claim once they become aware of the uncompensated loss, which may only become evident after the underlying bodily injury claim is settled.

Stoesz v. State Farm

In Stoesz v. State Farm, the plaintiff had settled her underlying claim with the underinsured motorist’s liability carrier, Progressive, prior to the three-year statute of limitations, but her insurer, State Farm, did not approve the settlement until after the three year deadline had passed. Progressive also paid the claim after the three years had run.

The plaintiff then filed an underinsured claim against State Farm, alleging that the settlement agreement itself counted as payment and would extend the deadline by two years. The trial court didn’t agree and entered a judgment for State Farm, ruling that a settlement agreement was not a “payment” as required by statute. In June 2015, the Court of Appeals confirmed the trial court’s verdict.

In a situation like this, a plaintiff whose time is running out should consider simply filing a complaint against the at-fault motorist to preserve her underinsured claim against her own company for another two years. This is true particularly when the deadline is approaching and payment has not been received.

What Is Underinsured Motorist Coverage Anyway?

If you were hit by someone without insurance or with low limits of coverage that aren’t sufficient to pay for all your damages, the uninsured/underinsured motorist coverage on your own policy will pay for injuries to you and your passengers, and sometimes even damage to your vehicle if you are involved in a hit and run or a car accident caused by an uninsured or underinsured driver.

But for someone to be considered an uninsured/underinsured driver, he or she must meet one of the following criteria:

  • Have no automobile insurance at all
  • Have insurance with coverage insufficient to meet the minimum liability requirements of his state
  • Have insurance, but the claim was denied by the driver’s insurance company and he is unable to pay for your damages out of pocket

You will need to check your policy to make sure you chose to carry this coverage, because although insurers in Colorado are required to offer uninsured and underinsured coverage in the same amount as the bodily injury liability limits selected, UM/UIM can be waived if you do so in writing.

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