What You Need to Know from the Airth v. Zurich American Insurance Company Ruling

What You Need to

In Airth v. Zurich American Insurance Company, the Colorado Court of Appeals, Division II, was tasked with determining if the summary judgment ruling in the defendant’s favor was appropriate. Rickey Airth, the Plaintiff-Appellant, was injured in a vehicle accident when operating a tractor-trailer owned by the company he worked for—Solar Transport. The accident was the fault of an uninsured motorist. Solar Transport had an uninsured motorist policy in place at the time for $50,000 through Zurich American Insurance Company (“Zurich”), the Defendant-Appellee.

According to the Rocky Mountain Insurance Information Association, uninsured motorist coverage (UM) is used to cover many expenses in the event that you are involved in an accident with an at-fault motorist who does not have the state-required automobile insurance. Insurers are required to offer UM to the insured in the same amounts as the policy limits for bodily injury liability.

Plaintiff’s Challenge

Airth claimed the Zurich policy should have provided $1 million in UM coverage (and underinsured motorist coverage), which is equal to the limits of bodily injury coverage. He alleged that Zurich failed to adhere to statutory requirements that UM coverage be offered at the same limit as bodily injury liability and that Solar Transport had not rejected such an offer in writing.

The district court allowed for summary judgment in favor of Zurich because the defendant had sufficiently presented an offer to add the additional UM coverage. In addition, the court did not interpret that a written rejection of such an offer was statutorily required.

Interpreting Colorado Statutes

Summary judgment is appropriate when the plaintiff lacks material facts entitling them to a judgment based on the law. The Colorado Revised Statutes Title 10 Insurance § 10-4-609 Insurance protection against uninsured motorists–applicability states that no automobile liability policy should be issued unless UM coverage of equal limits is offered, except when the insured rejects the UM coverage in writing. Prior to issuing or renewing such a policy, the insurer must offer to provide UM coverage equal to the bodily injury liability limits. Insurers are not required to offer limits of UM coverage that exceeds the liability coverage limit.

Defendant’s Offer of Uninsured Motorist

Before the latest renewal of the policy for Solar Transport, Zurich sent documents to them relating to UM coverage. Zurich asserts that counsel for Solar Transport did affirm that the documents had been read. One document was titled “rejection of uninsured motorist coverage or selection of limits for Colorado.” This document began by explaining the right to reject uninsured coverage or choose a limit higher than minimum state limits for liability, which are $25,000 of coverage per person or $50,000 per accident.

Airth countered by saying this document was insufficient because it did not provide pricing for the premium, which would be required to bring UM coverage equal to that of the bodily injury coverage of $1 million. He believed that an “offer” would not be complete for consideration without such necessary pricing.

What Constitutes an Offer?

The court attempted to determine what is sufficient to constitute an offer in this context. The insurer has a duty to notify in a way that the insured can make an informed decision on its UM limits. The court may consider these factors:

  • The clarity of the explanation of the purpose of UM coverage;
  • Whether this explanation was made verbally or in writing;
  • Whether the options were specific; and/or
  • The price for the different levels of coverage.

In the primary “rejection of uninsured motorist coverage…” document, the details regarding UM coverage began clearly in the first sentence. The court relied on case law that ruled a failure to inform of the specific costs alone did not render the offer insufficient.

Written Rejection of Uninsured Motorist Coverage

In allowing the summary judgment in favor of Zurich, the court ruled that a written rejection of coverage was only necessary as it pertains to the minimum UM level. The 10-4-609(1) statute solely references the written rejection of coverage, which refers to minimum UM coverage. In the subsequent statute, which pertains to adding UM coverage beyond the levels equal to the state’s minimum for bodily insurance liability coverage, no such provision existed. The court may not interpret statutes based on words that are omitted within a provision.

What to Take from this Case

If you drive a company car, you should make sure you know what your employer’s insurance policy is and the amount of coverage that policy provides. If your work is dangerous or there is high risk for accidents, then you may want to think about getting your own or increase your own current uninsured motorist policy to supplement the protection provided by your employer. As the saying goes: hope for the best; prepare for the worst. And drive safely.

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