Insurance-Written Rejection of UIM Not Required

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Blevins v. Government Employees Ins. Co., __ Ariz. Adv. Rep. __ 1 Ca-CV 10-0272 (App. Div. I, March 24, 2011) (J. Portley)
ARS 20-259.01 REQUIRES UIM COVERAGE BE OFFERED IN WRITING BUT DOES NOT REQUIRE THE REJECTION OF COVERAGE ALSO BE IN WRITING

The plaintiff purchased automobile insurance from GEICO. The policy indicated he had rejected the underinsured motorist [UIM] coverage offered by GEICO. Subsequently the plaintiff was injured in an automobile accident and settled his claim against the adverse driver. He then made a UIM claim against GEICO which was denied. Plaintiff then sued GEICO for a declaratory judgment, breach of contract and bad faith claiming he rightfully had UIM coverage because GEICO failed to get his rejection of such coverage in writing. The trial court granted the plaintiff's motion for summary judgment on the issue but the Arizona Court of Appeals reversed.

The court of appeals cited to ARS sec. 20-259.01 (B) which expressly requires automobile insurers in Arizona make available and offer in writing UIM coverage to all insureds. A failure to make such a written offer entitles the insured to the coverage as a matter of law. Here it was uncontroverted that GEICO made a written offer of the coverage to the plaintiff and the plaintiff failed to sign the offer acknowledging acceptance of the coverage. There was no written evidence of rejection of the coverage. The court of appeals held that neither the express language of the statute nor the legislative history requires the rejection of UIM coverage be in writing nor does the statute require the use of the Department of Insurance form which asks the insured to sign off on a rejection of the coverage. The form in optional and the only requirement of ARS sec. 20-259.01 (B) is that the offer itself be in writing.

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