Court Limits UIM Recovery to Named Insured After Plaintiff Seeks Additional Household Coverage

The plaintiff, a resident of Erie County, New York, was legally traversing a four-way stop intersection when his vehicle was struck by a tortfeasor after she ran a stop sign. As a result, the plaintiff sustained extensive and severe injuries requiring medical care for the rest of his life. This medical care was valued far in excess of the tortfeasor’s auto insurance policy, as well as the plaintiff’s own underinsured motorist coverage.

After settling with the tortfeasor for her New York State minimum policy limits, the plaintiff attempted to collect underinsured motorist coverage under both his own auto policy and his parents’ auto policy, as he still lived in their home, despite that the vehicle involved in the collision was being insured only under his own policy. The defendant insurance company argued that the plaintiff was only entitled to the remining funds under his own underinsured motorist policy. Upon the refusal to pay out funds pursuant to the parents’ underinsured motorist policy, the plaintiff brought an insurance bad faith claim against the defendants.

After extensive discovery, the plaintiff dropped his bad faith claim and accepted the funds remaining under his own underinsured motorist policy, thereby avoiding a trial and additional exposure of more than triple the ultimate settlement amount.