Sammarco v. USAA Casualty Insurance
Sammarco v. USAA Casualty Insurance
Opinion of the Court
This is an appeal from a final judgment entered by the Superior Court. The plaintiff-appellant, Alan Sammarco, brought a declaratory judgment action against the defendant-appellee, USAA Casualty Insurance Company (“USAA”). Sammarco sought to reform an automobile insurance contract to provide uninsured and underin-sured motorist coverage (“UM/UIM”) from $15,000/$30,000 to $300,000/$500,000. The Superior Court denied Sammarco’s request and granted USAA’s motion for judgment on the pleadings.
Sammarco contends that USAA violated DeLCode Ann. tit. 18, § 3902(b) by failing to inform him, in a meaningful way, that he had the option to purchase additional UM/UIM coverage up to his bodily injury liability policy limits. Del.Code Ann. tit. 18, § 3902(b) reads as follows:
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*458 basic policy.1
Based upon this Court’s holding against it in Mason v. USAA
Issue on Appeal
The only question presented on appeal is the amount of additional coverage Sam-marco is entitled to receive by reformation of his UM/UIM policy with USAA. Sam-marco contends that he should receive UM/UIM coverage equal to his bodily injury liability policy limits of $300,000 per person and $500,000 per incident because those limits were being offered by USAA when his UM/UIM Policy was issued. USAA argues that section 3902(b) limits mandatory UM/UIM insurance, including that required by contract reformations like this one, at $100,000 per person and $300,000 per incident. We have concluded that Sammarco is entitled to have his UM/ UIM policy reformed to the same $300, 000/$500,000 limits that are in his bodily injury liability policy with USAA.
Facts
On May 2, 2004, Sammarco’s minor son was seriously injured in an accident when an automobile being operated by Sammar-co was hit head-on by an underinsured, drunk driver. At the time of the accident, Sammarco carried liability insurance with limits of $300,000 per person and $500,000 per accident through a contract with USAA. At the same time, Sammarco had UM/UIM motorist coverage with USAA at the statutory minimum of $15,000/$30,000.
USAA attached a declaration of coverages and corresponding costs for the various coverages that USAA offered, as Exhibit B to its Motion for Judgment on the Pleadings, as follows:
1st Car Add’l Car UM/UIM limits
$15,000/$30,000
$20,000/$40,000
$25,000/$50,000
$50,000/$100,000
$100,000/$200,000
$100,000/$300,000
$300,000/$500,000
$500,0.00/$500,000'
$500,000/$1,000,000
$1,000,000/$!,000,000
$14.00 $12.00
$17.00 $14.00
$18.00 $15.00
$23.00 $19.00
$32.00 $27.00
$33.00 $27.50
$51.00 $43.00
$64.00 $55.00
$69.00 $59.00
$85.00 $72.00
The foregoing schedule reflects that Sam-marco could have obtained UM/UIM coverage from USAA at the same level of his liability policy limits of $300,000/$500,000, for $51.00 a year.
The USAA declaration of coverages and offering materials also included the following statements:
• UM Coverage limits are initially issued at $15,000/$30,000 unless the coverage is rejected or a higher limit is select-, ed. Future renewals will remain the same.
• We offer higher limits of UM, which you may select, but the UM limits selected must not exceed your policy’s BI limit. To select a higher limit of UM coverage, you must check the appropriate box above, “UM Coverage Selection Option,” and sign and date the “Ac-knowledgement of Coverage Selections” at the end of this form.
Prior Precedents Distinguished
Once again, we are required to resolve a dispute over the reformation terms of a UM/UIM automobile insurance policy.
In Arms, the issue presented to this Court was an insured’s complete failure to make the offer of additional coverage as required by section 3902(b). In Arms, we held that when an insured breaches its section 3902(b) statutory duty to offer increased UM/UIM coverage, it results in an implied extension of a continuing offer of additional UM/UIM motorist coverage.
In Mason v. USAA,
In USAA v. Knapp,
Statute Preserves Contract Rights
In Humm v. Aetna Casualty, we held that the focus of section 3902(b) is to make additional UM/UIM coverage available above the basic minimum uninsured coverage and “then allow the insurer and the insured to engage in traditional means of contracting; that is by an offer and an acceptance.”
In accordance with our decision fifteen years ago in Nationwide Mut. Ins. Co. v. Starr, Sammarco’s right to reform his UM/ UIM policy with USAA is based upon the public policy identified by this Court in Arms and derived from the legislative intent of section 3902.
Conclusion
The judgment of the Superior Court is reversed. This matter is remanded for further proceedings in accordance with this opinion.
. Del.Code Ann. tit. 18, § 3902(b).
. Mason v. USAA, 697 A.2d 388 (Del. 1997).
. State Farm Mut. Auto Ins. Co. v. Arms, 477 A.2d 1060 (Del. 1984).
. Id.
. Id.
. State Farm Mut. Auto Ins. Co. v. Arms, 477 A.2d 1060 (Del. 1984).
. Mason v. USAA, 697 A.2d 388 (Del. 1997).
. USAA v. Knapp, 708 A.2d 631 (Del. 1998).
. Id.
. Humm v. Aetna Cas. & Sur. Co., 656 A.2d 712, 716 (Del. 1995).
. Mason v. USAA, 697 A.2d 388 (Del. 1997).
. Nationwide Mut. Ins. Co. v. Starr, 575 A.2d 1083 (Del. 1990).
. State Farm Mut. Auto Ins. Co. v. Arms, 477 A.2d 1060 (Del. 1984).
. Humm v. Aetna Cas. & Sur. Co., 656 A.2d at 716 (Del. 1995); State Farm Mut. Auto Ins. Co. v. Arms, 477 A.2d 1060 (Del. 1984).
Reference
- Full Case Name
- Alan SAMMARCO, Below v. USAA CASUALTY INSURANCE COMPANY, Below
- Cited By
- 1 case
- Status
- Published