Opinion ID: 2461615
Heading Depth: 1
Heading Rank: 7

Heading: changes to an existing insurance policy are material when the changes meaningfully alter the risk relationship between the insurer and the insured

Text: ¶ 21 Having concluded that material changes to a policy can trigger the insurer's obligation to obtain a waiver from the insured, we now examine what changes to an existing contractual relationship are sufficiently material to create a new policy under the statute. In the briefing before this court, the parties focus heavily on the changes in this casespecifically whether State Farm's change in its policy booklet, issuance of a new policy number, and the Iversons' addition of a 2001 PT Cruiser constituted material changes to the policy. Ms. Iverson asks us to conclude that these changes are material enough to create a new policy. State Farm urges us to conclude that the post-2001 changes to the Iversons' policy are minor in character and did not create a new policy. ¶ 22 We decline the parties' invitation to examine the specific alterations to the Iversons' policy for two reasons. First, to opine on the specific changes to the Iversons' policy would improperly resolve the underlying factual dispute between the parties. This is the task of the federal district court. [14] Second, although other jurisdictions have approached this question by categorically labeling particular types of changes to a policy as either material or nonmaterial, we conclude that this approach ignores the specific factual circumstances and risks faced by each individual policyholder. Thus, we conclude that we cannot categorically say that a particular change is always material or immaterial. Rather, to determine whether a change to an existing policy is so material that it creates a new policy under the statute, the totality of the circumstances must be considered. In this analysis, the primary focus should be on whether the change to the policy would meaningfully alter the risk relationship between the insurer and the insured. Relevant, but not determinative, considerations may include: 1. Whether the change to the policy was one requested by the insured or a routine or ministerial change made by the insurance company. [15] 2. Whether in response to the change, the average insured would want to reevaluate the amount of risk she would be willing to bear under the policy. And 3. Whether the character of the changes would lead the average insured to believe she was receiving a new policy. We conclude that these questions, along with any other relevant considerations focused on the type of changes made to the policy, will help courts determine whether an individual has a new policy under the UIM Statute such that an affirmative waiver of UIM coverage is required.