Do I need permission from my uninsured motorist insurance carrier before I settle with the at fault driver’s bodily injury insurer?
Yes. Your policy with UM insurance carrier and Florida Statute 627.727 requires you to get their permission before you settle for the BI limits. It seems strange but it is not optional. If you don’t, it’s considered a breach of the policy. This is an example of why victims of car accidents who get insured need the best personal injury lawyer help they can get, otherwise they can screw themselves out of coverage. Insurance policies are contracts between you and the insurance company. It may seem unfair or silly, but such contract UM permission provisions are enforceable.
What can happen if you settle without your Uninsured Motorist insurance company’s approval?
You may not be able to pursue a claim and get any money. By settling without getting permission and a waiver of subrogation rights from your own insurance company, you’re technically in breach of the insurance policy, terms and conditions. Therefore, you might forfeit your right to make a claim. This is a serious consequence when trying to recover damages, your life is turned upside down, and you need money for medical bills and lost income from being out of work.
In this personal injury lawyer’s experience, the request for permission to accept the BI limits is usually a formality. The insurance company should give you permission to accept the underlying bodily limits from the at fault driver’s insurance policy. You can then go on to bring a claim against your own uninsured motorist policy. But seeking permission to settle is deemed a condition precedent that the insured must perform before they can bring such a claim against their own UM carrier. The insurance company will hold you to this condition precedent too. They will not be nice and let it slide if you or your lawyer fail to ask for permission.
If you try to proceed without doing so and sue the UM insurer, they will move to dismiss the lawsuit for failure to comply with a condition precedent. And the Judge will indeed oblige them, entering an order dismissing your UM lawsuit. It is an affirmative defense that the insurer will be victorious on because the Florida courts uphold the bargain the parties made in the written insurance contract. The rationale why insurance companies put this in their policies and it’s allowable by Florida law, is because theoretically, one insurance company may disagree or have more information than another insurance company about the claim. The UM insurance company may not believe the damages are sufficient or the liability is such that the bodily injury limits should be paid or at least not exceed the BI limits. The UM carrier would be of the opinion the case is defensible or would not likely bleed into their UM coverage which is considered excess above the primary BI limits. Much less be valuable enough than to move into or exceed their own uninsured motorist limits.
When the UM insure rejects the request to settle with the BI carrier, it must actually pay the BI limit equivalent and then will defend and deny the remaining UM claim brought by the client. Again, this would be a very uncommon move by the UM carrier. And doing so you carrier must be very confident in either the liability or damages aspect and likes its chances of winning the personal injury case rather than having to pay anything.
When your UM carrier approves the settlement, which you want in writing, you can execute a full release and finalize the settlement with the at fault driver and their BI insurer.
What happens if your UM carrier doesn’t approve the settlement?
As mentioned above, in the unusual situation that your own UM carrier does not give you permission to settle with the at fault driver and their BI insurance company, the UM carrier must pay you the amount of the written offer of the BI carrier at that time. It then gets subrogation rights to go after the at fault driver and their insurer for the amount it paid out.
Your UM carrier will does this by making subrogation claim or filing suit for return of that money. In other words, they can seek repayment of the amount they voluntarily covered/paid and then also fight your UM claim. This typically means they will be fighting the UM claim very hard which they can do with or without giving permission, which is why it is not commonly utilized by UM carriers. The UM carrier will usually give permission to settle and the just fight the UM claim, standing in the shoes of the at fault driver.
How long does your UM carrier have to approve or reject the settlement?
Your UM carrier has 30 days to accept or reject the permission to settle. If they don’t respond, it is considered waiver and you may proceed to settle the BI limits with the at fault driver’s insurance company.
Get In Touch
Uninsured Motorist Coverage can complicated really fast. You need to hire a Miami car accident lawyer like Perkins Personal Injury Lawyers to guide you properly so as not lose your coverage. If you or a loved one has been injured in a car accident involving an underinsured driver, and need help woith your own UM insurance company like Progressive, Geico, Allstate State Farm, Auto Owners, AIG, Chubb, etc., fill out our contact form Perkinslawoffices.com or call 305-741-5297 today for a free consultation. We have offices in Miami, FL and Boca Raton, FL.
