Johnson v. State Farm: Underinsured Motorist Coverage

The Colorado Court of Appeals recently decided the case of Johnson v. State Farm. That case involved State Farm’s denial of Underinsured Motorist (UIM) coverage to a named insured, Johnson. The Court of Appeals determined that State Farm had to provide UIM Coverage to Johnson.

The facts of the case involved another State Farm insured, Satriano, who helped her roommate, Johnson, purchase a car. Johnson insured that vehicle with another insurer, and when the policy on that vehicle expired, Satriano contacted Satriano’s insurance company, State Farm, to insure Johnson and their vehicle. Johnson was not present when Satriano contacted State Farm to purchase the insurance on their vehicle, but Satriano informed Johnson that he was “fully covered.” Both Satriano and Johnson were listed as a “named insured” on the State Farm policy. Satriano signed a form waiving UM/UIM coverage on the vehicle, but Johnson did not.

Johnson was involved in a motor vehicle accident and was seriously injured. Johnson made a claim for UIM coverage since he did not sign the form waiving UIM coverage, but State Farm denied paying on the policy that covered Johnson’s vehicle that he shared with Satriano and argued that Satriano’s waiver waived UIM coverage for all named insureds. Johnson sued State Farm and the trial court held that Satriano acted as an agent for Johnson; therefore, Johnson was bound by the waiver that Satriano had signed waiving UIM coverage on their vehicle.

Johnson appealed the trial court’s decision and the Colorado Court of Appeals determined that legislative history and policies required that signed waivers for UIM coverage apply only to the person that had signed that waiver. The Court of Appeals then examined common law agency principles and concluded that one named insured may not act as an agent for another when waiving UIM coverage unless the agent acts with express actual authority from the other. The trial court’s judgment was reversed, and State Farm was ordered to provide UIM coverage to Johnson because he did not sign the UIM waiver form.

What does this mean to you? If an insurance company is denying coverage for your damages after an auto accident, you should retain an experienced law firm to fight for all of the coverage available to pay for your damages. At the Mintz Law Firm we help injured victims recover for their damages. If you or a loved one has been injured in an auto accident, contact Mintz Law Firm at 1-800-4-INJURY.