Recently, the District Court for the Eastern District of Pennsylvania in Vasquez et al v. Nationwide Property & Casualty Insurance Company, 2024 WL 4339987 (E.D.Pa. September 27, 2024) analyzed an insurance coverage concerning whether an underinsured motorist (“UIM”) benefits waiver executed prior to the defendant’s “renewal policy” thatmade various changes created a “new policy” that required a new waiver.
In Vasquez, the Plaintiffs were injured in a motor vehicle accident and sought UIM benefits under their own automobile insurance policy that validly waived UIM coverage. Prior to the accident, the Plaintiffs’ policy renewed every six months with the same terms, limits, and coverage after the initial UIM waiver was executed. At one of the six month increments when the policy would be renewed, Nationwide sent notice of a “policy renewal” called “One Product Initiative” that informed the Plaintiffs of impending changes. Nationwide gave the Plaintiffs notice that there was no UM/UIM coverage with “One Product Initiative.” The initial policy on its Declarations page said, “Uninsured Motorists-Bodily Injury” and “Underinsured Motorists-Bodily Injury” with “Rejected.” The “One Product Initiative” policy was issued with a new policy number.
The Plaintiffs argued that the aforesaid changes did not constitute a “renewal” but instead created a brand-new policy that was not accompanied by a new “waiver” of UIM coverage thereby entitling the Plaintiffs to UIM benefits. The District Court ruled that the policy was a renewal and not a new policy. The opinion focused on the fact that this “One Product Initiative” was a renewal because there was no change in substance between the policies. First, the Court reasoned that an insured’s valid waiver of UIM coverage remains in effect throughout the lifetime of the policy, including renewals, until affirmatively changed by the insured. Moreover, the Court explained that there was no affirmative change because there was the insured never elected to have UIM coverage, as UIM was validly waived by the insured in the initial policy and the “One Product Initiative” policy did not provide UIM coverage. The Court also noted that neither policy charged a premium for UIM coverage. Moreover, the Court reasoned that the change in policy number and the lack of language in the renewal policy stating that UIM coverage was “Rejected” did not amount to a reduction in coverage. Second, the Court noted that Nationwide complied with the statutory requirements for a UIM waiver to remain valid when issuing a renewal. MVFRL section 1731 provides that “on policies in which either uninsured or underinsured coverage has been rejected, the policy renewals must contain notice in prominent type that the policy does not provide protection against damages caused by uninsured or underinsured motorists.” Here, prior to the “One Product Initiative” renewal, Nationwide sent Plaintiffs a notice informing them of the policy number change which Plaintiffs acknowledged they received. This was sufficient notice pursuant to the statute for the validity of the UIM waiver to remain intact. The Court thus ruled that the “One Product Initiative” was a renewal and as such the Plaintiffs were not owed UIM benefits because the UIM waiver was valid.
The Vasquez decision can be found here.
For additional questions, please contact Alyssa Klier, Esq. and/or Glen Shikunov, Esq.
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