Duncan Sets Standard for UM Rejection Form

On February 6, 2013, Louisiana’s Third Circuit Appellate Court ruled on a case involving validation of a UM rejection form.  Louisiana requires that automobile liability insurance include UM (uninsured/underinsured motorist) coverage in the same amount as the liability limits, unless the insured expressly rejects or reduces the UM coverage on a form promulgated by the Commissioner of Insurance.  Six elements of the form must be present to comply with the requirements set forth in the Louisiana Supreme Court case of Duncan v. U.S.A.A. Insurance Co., 06–363 (La. 11/29/06), 950 So.2d 544: (1) initialing the selection or rejection of coverage chosen; (2) specifying the amount of coverage selected for each person and accident if lower limits are chosen; (3) printing the name of the named insured or legal representative; (4) signing the name of the named insured or legal representative; (5) filling in the policy number; and (6) dating the signature. 

UM Rejection Form Valid if Essentially the Same as What the Department of Insurance Requires

In Scarborough v. Randle, 12-1061  (La. App. 3 Cir. 2/6/13), 109 So.3d 961, the UM rejection form that was used was essentially the same as that prescribed by the Commissioner of Insurance, except that it omitted the two-line header, “State of Louisiana[,]” followed by: “This form was promulgated pursuant to LRS 22: 1406.D(1)(a)(ii).  This form may not be altered or modified.”  Following the Louisiana Supreme Court’s decision in Banquer v. Guidroz, 09-466 (La. 5/15/09), 8 So.3d 559, in which the Court declined to apply a hyper-technical interpretation of the above requirements, the Third Circuit found that the enumerated requirements of Duncan were undisputedly fulfilled.  The Court explained that “[a]lthough the language advising of the prohibition against altering or modifying the form is absent, the form used in this case was not altered or modified.  The form is otherwise identical to that of the insurance commissioner and constitutes a valid and enforceable waiver of UM coverage.”  By doing so, the appellate court appears to reaffirm its focus on the Duncan requirements.

The court also rejected a second argument by plaintiffs who argued that the UM rejection form was invalid because the named insured was incorrect.  In Scarborough, the company’s name changed slightly when it converted from an LLC to a corporation.  Otherwise, the name of the company (Medical Technology of Louisiana) remained the same.  The Third Circuit found that there was no “material” discrepancy as to the identification of the named insured; thus, the form was valid. 

Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.