Major Developments in Delaware Auto Insurance Protection

Beginning January 2014 for policies written/renewed after January 3, 2014, Delaware automobile insurance protection will take a major step forward in providing protection for citizens of the First State. In many instances, our Delaware clients are involved in an accident caused by an individual without adequate insurance coverage. This underinsured individual may have only limited liability coverage. Under these circumstances, victims of negligence can access their own automobile insurance policy for underinsurance protection which should be a part of everyone's comprehensive insurance protection package. Under existing Delaware law, IF an injured victim elected Uninsured protection in an amount less than or equal to the amount of coverage available under the at-fault driver's policy, you will NOT be permitted to access your own policy for underinsurance protection. Therefore, if you have $50,000 in Underinsured coverage and sustained tragic injuries worth in excess of $100,000, you are still NOT permitted to access your own policy unless the at-fault driver has less than $50,000 in coverage. The flaw in the logic of the law is obvious -- the driving force should be the value of your injuries not the amount of the respective coverages in relation to each other. Moreover, the victim has paid premiums for extra coverage! This injustice has been rectified by the Legislature of Delaware and the law has been amended "to allow innocent victims of motor vehicle collisions to access their own underinsurance benefits in circumstances where the victim's damages are greater than the amount of the negligent driver's insurance policy limits." 

Thus, for policies written or renewed after January 3, 2014, victims of automobile negligence by drivers with inadequate insurance will only need to demonstrate the at-fault driver's insurance is insufficient in relation to the injuries sustained to be able to access underinsured benefits. This development in the law is logical and corrects a long-standing quirk in our laws that left many victims of negligence without sufficient legal recourse.

So, after January 3, 2014: 1) talk to your insurance agent about underinsurance coverage on your automobile policy; and 2) select or renew adequate underinsurance coverage in case you or your loved ones are struck and injured by an underinsured driver (remember, a Delaware driver may carry as little as $15,000 in liability coverage). Be mindful, though, a renewal of your policy before January 3, 2014 will NOT qualify. Only your first renewal AFTER January 3, 2014.

Call the law firm of Schmidt, Kirifides and Fridkin and talk to us about any questions you have.

DELAWARE STATE SENATE  147th GENERAL ASSEMBLY  SENATE BILL NO. 61

AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE RELATING TO INSURANCE.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
 

Section 1. Amend §3902(b)(2), Title 18 of the Delaware Code by making insertions as shown by underlining and deletions as shown by strike through as follows:

(b) Every insurer shall offer to the insured the option to purchase additional coverage for personal injury or death up to a limit of $100,000 per person and $300,000 per accident or $300,000 single limit, but not to exceed the limits for bodily injury liability set forth in the basic policy. Such additional insurance shall include underinsured bodily injury liability coverage.

(2) An underinsured motor vehicle is one for which there may be bodily injury liability coverage in effect, but the limits of bodily injury liability coverage under all bonds and insurance policies applicable at the time of the accident total less than the limits provided by the uninsured motorist coverage are less than the damages sustained by the insured. These limits shall be stated in the declaration sheet of the policy.

Section 2. The provisions of this law shall apply to motor vehicle insurance policies issued and/or renewed six (6) months after enactment.

SYNOPSIS
 
The purpose of this amendment is to allow innocent victims of motor vehicle collisions to access their own underinsured insurance benefits in circumstances where the victim's damages are greater than the amount of the negligent driver's insurance policy limits.  Delaware courts have ruled that if the innocent victim and the negligent driver have the same policy limit or the victim's policy limits are less than the negligent driver's, then the negligent driver is not considered "underinsured" even if the negligent driver's policy limit is inadequate to compensate the innocent victims. This amendment will rectify these inequities.  Nationwide Mut. Ins. Co. v. Williams, Del. Supr.,695 A.2d 1124 (1997).

The provisions of the law will not affect existing insurance policies, and will apply only to renewing or new policies that become effective six (6) months after the law is enacted.

Author: Senator McDowell