Kristen Larson |
On February 19, 2015, the Florida Supreme Court issued its opinion in Chase v. Horace Mann Insurance Company (SC13-2013). The main issue was whether Richard Chase’s lowering of the uninsured motorist (“UM”) limits in an auto insurance policy was still binding when the named insured on the policy was switched from him to his daughter, Alison Chase. Section 627.727(1), Florida Statutes, requires an insured to select lower UM limits in writing. Alison Chase claimed that the election of lower limits by her father was not binding on her because she never accepted them in the manner prescribed by statute.In 2001, Richard Chase took out a policy with Horace Mann Insurance Co. (“HMI”) on a 1992 Chevrolet Geo. Richard signed a form confirming his request to lower the UM limits. Alison Chase was listed on that policy as a driver, but not as an insured. In 2004 Alison replaced Richard as the sole named insured on the policy and the Geo was replaced with a Ford Escort. At this time HMI issued Richard a new policy for his 2004 Jeep. Because Richard was issued the new policy and not Alison, he had a second opportunity to select lower UM limits. However, Alison was never given the opportunity to accept or deny the UM limit reduction on her policy. Over the course of the next two years, Alison changed the address on the policy and replaced the car. In 2007, she moved back in with her father and once again changed the policy address to her father’s address. At this time her father was added to the policy as a driver, but not as an insured. One month later they were in an accident that injured her and claimed the life of her father. HMI claimed that the UM limits were the lower limits that Richard had initially requested for the policy. Alison claimed that she never consented to the lower limits and that the UM coverage limits should be the same as the policy’s bodily injury limits.Alison sued HMI on her own behalf and as the representative of her father’s estate. The trial court found for Alison, holding that she should have had the opportunity to deny the lower limits. The appeals court found that the election of the lower limit was binding on Richard’s estate but not on Alison personally. The Court reviewed that decision de novo.
HMI’s argument primarily relied on State Farm Mutual Automobile Insurance Co. v. Shaw, 967 So. 2d 1011 (Fla. 1st DCA 2007). Opinion at 10. In Shaw, the 1st DCA held that the lower UM limits elected by the ex-wife of the insured (at the time that they were still married) remained binding on the insured when he replaced the policy with a new policy having the same coverage limits. The court reasoned that the divorce “did not require a new UM coverage offer by State Farm,” because the changes to the replacement policy did not affect the bodily injury limits on which UM limits are based. 967 So. 2d at 1015.
Alison primarily relied on Creighton v. State Farm Mutual Auto Insurance Co., 696 So. 2d 1305 (Fla. 2d DCA 1997). Opinion at 10. The facts of Creighton are as follows: Peter Creighton’s employer (McNamara Associates) purchased an automobile insurance policy for a Honda Accord on which Peter Creighton was listed as the driver. A McNamara agent signed for the lower UM limits. Four years later, Peter purchased a policy under his own name for an Infiniti he was leasing. McNamara requested that any policy credits from the policy for the Accord be applied to Peter’s new policy. Instead of creating a new policy, State Farm edited the McNamara policy. The 2nd DCA held that despite “the mechanics State Farm employed, this is a new policy as to Peter Creighton, just as if the McNamara policy had been canceled and a new policy issued in Peter Creighton’s name.” Id. at 1306. Therefore, because Peter never signed a waiver accepting the lower UM limits, they were not binding.
The Court distinguished this case from Shaw because Shaw had been a named insured on the policy his ex-wife had lowered the UM limits on, and thus had the opportunity to contest the lower limits. In contrast, Alison had not been a named insured on the policy that her father unilaterally lowered the UM limits on. Therefore, Alison had no opportunity to contest the change.
The Court agreed that as in Creighton, the removal of the sole named insured and addition of a new named insured created a separate policy under section 627.727(9), Florida Statutes (2008). Therefore, for the purposes of section 627.727(1), Florida Statutes, the UM limits were to be equal to the bodily injury limits unless Alison rejected these limits in writing. Because Alison had no opportunity to do so, the UM limits remain equal to the bodily injury limits in regards to both Alison and her father’s estate.