Opinion ID: 2765943
Heading Depth: 3
Heading Rank: 1

Heading: Minimum Recovery/Full Recovery Distinction

Text: [¶25] Dickau relies in large part on the distinction between minimum recovery statutes and full recovery statutes to argue that section 2902 applies to his umbrella policy. According to this view, minimum recovery statutes—which require insurers to carry only a minimum level of UM insurance (generally to comply with the state’s financial responsibility statute)—do not apply to umbrella policies because these statutes are intended to allow an injured person only the recovery to which he would be entitled if the at-fault party carried the minimum coverage required by statute. Bartee v. R.T.C. Transp., Inc., 781 P.2d 1084, 1092 (Kan. 1989), superseded by statute, L. 1988, ch. 152, § 1, as recognized in Fiorella v. Travelers Prop. Cas. Ins. Co., 142 P.3d 321 (Kan. Ct. App. 2006). This view further provides that full recovery statutes—which require UM coverage in an amount equivalent to the entire amount of bodily injury liability coverage for which the insured’s policy provides—do apply to umbrella policies because they 5 Maine is unlike New Hampshire, which has opted to expressly incorporate umbrella policies into its UM statute. N.H. Rev. Stat. Ann. § 264:15(1) (West, Westlaw through Chapter 330 of the 2014 Reg. Sess.) (requiring that “umbrella or excess policies . . . shall also provide the uninsured motorist coverage equal to the limits of liability purchased, unless the named insured rejects such coverage in writing”). 14 are intended to afford an injured person with damages to the extent of the insured’s policy limits. Bartee, 781 P.2d at 1092-93. [¶26] As discussed below, we join other states in declining to draw such a distinction. See Stoumen v. Pub. Serv. Mut. Ins. Co., 834 F. Supp. 140, 142 (E.D. Pa. 1993) (“[T]his Court does not believe that the type of uninsured motorist statute that a legislature chooses to adopt is dispositive of the issue of whether the legislature also intends to include umbrella policies within the statute’s reach.”); Apodaca, 255 P.3d at 1102 (“[W]e find the distinction drawn by other courts between ‘minimum liability’ and ‘full recovery’ UM/UIM statutes unpersuasive . . . , and do not rely on this reasoning.”); Rowe v. Travelers Indem. Co., 800 P.2d 157, 159 (Mont. 1990) (“[B]oth parties agree that the distinction between ‘minimum liability’ and ‘full recovery’ statutes is meaningless.”). [¶27] Our primary rationale for declining to make a distinction based on the “type” of recovery provided by the statute is that the process used by the Maine Legislature in enacting and amending section 2902 belies any suggestion that the Legislature intended to do so. As of 1969, section 2902 provided that Maine was a minimum recovery state, requiring UM coverage of “not less than the minimum limits for bodily injury liability insurance provided for under the motorists financial responsibility laws of this State.” P.L. 1969, ch. 132, §§ 1, 21 (effective Sept. 1, 1969). 15 [¶28] It was not until 1999 that the full recovery language that is now included in section 2902 was finally enacted.6 P.L. 1999, ch. 271, § 1 (effective Sept. 18, 1999). Thus, Maine was a minimum recovery jurisdiction for the first thirty years after the UM statute was enacted, and has been a full recovery state only for the last fifteen years. Notwithstanding the 1999 change in the amount of coverage required, in the forty-five years since section 2092 was enacted, the Legislature has never broadened the class of policies to which UM coverage applies. Instead, it has maintained the parameters of UM coverage as applying to policies “insuring against liability arising out of the ownership, maintenance or use of any motor vehicle.” Compare 24-A M.R.S. § 2902(1) with P.L. 1969, ch. 132, § 1; see Apodaca, 255 P.3d at 1106-07. Indeed, in 2005, the scope of the UM coverage that is required was curtailed rather than expanded by an amendment to section 2902 providing that only injuries “sustained by an insured person” would be compensable, in order to clarify that “an insurance policy may limit uninsured motorist coverage to the recovery of damages by an insured person.” P.L. 2005, ch. 591, § 1 (effective Aug. 23, 2006); L.D. 2021, Summary (122nd Legis. 2006). 6 In 1975, the Legislature briefly amended section 2902 in a way that rendered Maine a full recovery state. P.L. 1975, ch. 437, § 2 (effective Oct. 1, 1975). Just a few months later, however, the Legislature repealed the full recovery language of section 2902 in emergency legislation, declaring that the requirement that insured persons notify their insurer if they elected only the minimum UM coverage rather than the full policy limit was “unworkable” and “cause[d] confusion.” P.L. 1975, ch. 676 (emergency, effective Mar. 23, 1976). 16 Although this language is not at issue in the present matter, the amendment demonstrates the Legislature’s intent to limit the scope of required UM coverage. [¶29] Also noteworthy is that although Maine’s UM statute now has a full recovery component, it is not universally a full recovery statute. Recovery up to the full value of coverage is the default provision as to personal automobile liability policies (i.e., those policies to which the MAICCA does apply). 24-A M.R.S. § 2902(2). As to those policies to which the MAICCA does not apply, only minimum recovery is required. 24-A M.R.S. § 2902(2). The scope of UM coverage that is required is otherwise identical whether the statute is applied to personal automobile liability policies or other policies, and we perceive no basis upon which to distinguish how the UM statute is applied to an umbrella policy based on whether or not the policy is a personal automobile liability policy. The rationale for both types of UM coverage is the same: compensation for innocent insured injured persons. Given that rationale, it would be absurd to make a distinction based on whether a portion of the statute provides for full recovery. See Doe, 2014 ME 11, ¶ 15, 86 A.3d 600.7 7 We also note that other jurisdictions with full recovery statutes have refused to apply UM coverage requirements to umbrella policies. The UM statute in Massachusetts, for example, provides for full recovery—“in amounts or limits prescribed for bodily injury or death for a liability policy”—but the Massachusetts Supreme Court holds that “an umbrella policy is not an auto liability insurance policy under [the] UM statute, and therefore need not provide UM benefits.” Liberty Mut. Ins. Co. v. McLaughlin, 590 N.E.2d 679, 680 & n.2 (Mass. 1992) (quoting Mass. Gen. Laws ch. 175, § 113L(1) (West, Westlaw through Chapter 389 of the 2014 2nd Annual Session)); see also Archunde v. Int’l Surplus Lines Ins. Co., 905 P.2d 1128, 1130-31 (N.M. Ct. App. 1995) (holding that New Mexico’s full 17 [¶30] Furthermore, some of the decisions that have relied on the minimum recovery/full recovery analysis have been superseded by statutes that now expressly exclude umbrella policies from UM requirements. See Fiorella, 142 P.3d at 325 (rejecting Bartee based on subsequent statutory amendments); see also Continental Ins. Co. v. Howe, 488 So. 2d 917, 920 (Fla. Dist. Ct. App. 1986) (discussing the Florida legislature’s amendment of its full recovery UM statute to exclude umbrella policies, notwithstanding Florida’s prior case law applying the UM statute to umbrella policies). [¶31] For these reasons, we conclude that the difference between minimum recovery statutes and full recovery statutes is a meaningless distinction that sheds no light on the Legislature’s intended scope of the application of section 2902.