September 2, 2009

TO ALL INTERESTED COMPANIES

           
            On August 28, 2009, the Kansas Supreme Court issued its opinion in Phillips v. St. Paul Fire & Marine Insurance Co., and the decision may be of interest to you.

            Plaintiff claimed he was injured in a motor vehicle accident while he was on the job with the Unified Government of Wyandotte County and Kansas City, Kansas.  He claimed the accident was due to the fault of another driver, who was underinsured.  His claim against St. Paul was a claim for underinsured motorist benefits.

            St. Paul had issued a policy of automobile insurance to the Unified Government of Wyandotte County and Kansas City, Kansas.  The liability insurance limit was $500,000.  However, the policy showed that the limit for underinsured motorist coverage was $50,000.  Phillips claimed that the policy was required to provide $500,000 in UIM coverage because the rejection form signed on behalf of the Unified Government with regard to the 2003 policy did not state the limit of coverage that was sought.  The blank that should have contained “$50,000” to correspond to the limit on the declarations to the policy was never filled in.

            The 2003 policy purchased by the Unified Government from St. Paul was a new policy.  The Unified Government had been insured in 2000, 2001, and 2002 but had purchased its coverage from a different carrier.  The Unified Government had purchased a St. Paul auto policy in 1999, and there was a properly executed and completed rejection form with regard to UIM coverage that pertained to that 1999 policy.  The government rejected UIM coverage down to $50,000 in that 1999 rejection form.

            The Court held that it did not matter that the 2003 rejection form was not properly completed because no rejection form was necessary.  Since the Unified Government had a properly executed and completed rejection form in 1999, the Court held that St. Paul had complied with the statute which required a rejection form.  The Court held it did not matter that the 2003 policy was not a renewal or a replacement of a prior St. Paul policy.  The Court held it did not matter that the Unified Government had purchased insurance elsewhere for a 3 year intervening period.  Since the Unified Government had rejected UIM coverage above $50,000 in 1999, St. Paul did not have to provide it and did not have to get a new rejection form unless and until the Unified Government specifically requested UIM coverage with limits in excess of $50,000. 

            As has been our practice in the past, I have not enclosed a copy of the opinion with this letter.  If you would like to have a copy of the opinion, you can access it here.

                                                                       
SCHMITT MANZ SWANSON & MULHERN, P.C.
Paul Hasty, Jr.
7101 College Blvd., Suite 350
Overland Park, KS  66210
Telephone: (913) 317-8068
phasty@msmlawkc.com