Woodland Hills personal injury lawyer Barry P. Goldberg is an expert on all things “Uninsured Motorist.” In fact, just last week we received a call from an out of state counsel that was shocked when he found out that a California insurer sold a $1 million Umbrella Policy without explaining that 1 ) Uninsured Motorist Coverage was available in that amount; and 2) the insurer failed to strongly recommend that coverage. Then, the insured was injured in a catastrophic accident with an uninsured motorist. That counsel wanted to sue the insurer for its “obvious” negligence.
Unfortunately, it is not that easy. This is what I told that out of state counsel.
In California, an insurance agent’s duty is only to ensure that a policy complies with the minimum levels of UM coverage mandated by statute. (Pabitzky v. Frager (1985) 164 Cal.App.3d 103, 403.) The agent does not breach his duty “by not advising them to carry uninsured motorist insurance in an amount greater than the statutory minimum.” (Id. at pp. 402-03.) The rule is that an insurer owes no duty to its insured (1) to make available a particular kind of insurance; (2) to advise about the availability of such insurance from another carrier; or (3) to inform the insured of inadequacies in coverage. (Gibson v. Government Employees Ins. Co (1984) 162 Cal.App.3d 441, 452.) An injured insured cannot sue his insurer for wrongfully failing to recommend a higher level of UM coverage. (Id. at pp. 443-44.)
The rule absolving the insurer and its agent from a duty to advise the insured to obtain more UM coverage in a primary policy applies with equal force to UM coverage in an umbrella policy. (Fitzpatrick v. Hayes (1997) 57 Cal.App.4th 916 (Fitzpatrick).) In Fitzpatrick, the plaintiff was standing next to her car when she was struck by an underinsured motorist. She suffered brain damage and was not made whole by her auto insurance, though she was carrying the maximum UM coverage offered by her insurer. Fitzpatrick sued her long-time insurance agent, for negligently failing to advise her of the availability and advantages of a personal umbrella policy with $1 million in UM coverage. (Id. at pp. 918-20.)
The rule of non-liability changes only if (1) the agent misrepresents the scope of the coverage provided, (2) the insured requests a particular type of coverage, or (3) the agent assumes an additional duty by express agreement or by promising special expertise. (Id. at p. 927.)
Broad statements like wanting “the upper limits of coverage” are not dispositive. Public policy does not impose a duty on agents “to affirmatively volunteer advice . . . regarding not just additional underinsured motorist coverage, but indeed the availability of a new and separate policy to effectuate that additional coverage.”
An agent’s general lack of duty to disclose the availability of UM coverage in an umbrella policy is not affected simply because a client requests coverage for “everything.” Asking an insurance agent for “‘the best policy there is’” and being assured of “full insurance coverage” does not give rise to a duty to procure UM coverage for the insured or to advise the insured about the availability of such coverage.
Given that there are more than 2 million uninsured drivers in California and that a responsible insurance purchaser wants to do everything in his power to protect his family, it is incumbent on the insured to ask for higher uninsured motorist limits!