Louisiana Supreme Court Clarifies Standards for Valid UM Insurance Rejection Forms

By John M. Parker, Jr.

On December 9, 2022, the Louisiana Supreme Court issued a decision in Berkley Assurance Co. v. Melissa Willis, et al, No. 2021-C-01554, 2022 WL 17546742, shedding further light into the fog that is assessing what constitutes a valid rejection of uninsured/underinsured motorist (UM) insurance coverage. By law, named insureds to an auto liability policy also receive UM coverage equal to the limits of their liability coverage unless the insured selects lower limits or rejects UM coverage altogether. Such reduction or rejection must be done by the insured “on a form prescribed by the Commissioner of Insurance.” See La. R.S. 22:1295 (also known as the UM statute). Over the years, courts have grappled with determining whether insureds have executed a valid rejection or reduction of UM coverage under the law. This is in part because the UM statute sets forth few requirements to satisfactorily waive coverage other than the waiver shall be made on a form provided by the Insurance Commissioner. The current version of the Commissioner’s form asks for information that is not required under the UM statute—specifically, the insurer’s name, group name, or logo. So, what is the legal effect when the name of the insurer is not filled out on the UM coverage selection form? This is the question that the Louisiana Supreme Court recently addressed.

In Berkley, a towing company’s employee was killed on the job by an uninsured motorist. The towing company filled out the Commissioner’s waiver form in attempt to select reduced UM coverage limits of $30,000, such that the liability limits of $1 Million would not apply to UM coverage. However, the towing company did not include the insurance company’s name or logo in the completed form. In reviewing the current version of the Commissioner’s form, the Supreme Court found that in order to effectively reject UM coverage, an insured must: (1) initial the selection or rejection of coverage chosen; (2) if limits lower than policy limits are chosen, then fill in the amount of coverage selected; (3) print the name of the named insured or legal representative; (4) sign the name of the named insured or legal representative; (5) fill in the insurer’s name, group name, or insurer’s logo; and (6) fill in the date. In a 4-3 decision, the Court interpreted the UM statute as requiring strict compliance with the Commissioner’s form; therefore, failure to properly include any of the foregoing six elements renders a waiver form invalid. Accordingly, the Court found the towing company’s attempt to select lower UM coverage limits was invalid due to the failure to include the insurer’s name or logo on the waiver form.

Berkley is noteworthy as it is yet another example of why it is important for insurers and insureds alike to carefully review and complete the current version of the Commissioner’s UM waiver form. Berkley is also significant in that it may provoke an amendment to the UM statute by the Louisiana Legislature. Both the opinion issued by Justice Griffin as well as a concurrence issued by Justice Crichton strongly urge the Legislature to re-evaluate the language of the UM statute in light of the Court’s interpretation. In particular, Justice Crichton (as well as Justice Weimer in dissent) noted the inequity that results to insurers who are compelled to provide additional coverage for insureds who did not want such coverage and did not pay for it. We will monitor the upcoming legislative session for any changes to the law.