Court Opinion

ID: 9576522
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:25:27.514412+00
Date Added: 2024-06-11T13:09:23.596884
License: Public Domain

Justice Parker
dissenting.
I respectfully dissent. The record includes the affidavit of Bernard Cox, Assistant Deputy Commissioner in the Property and Casualty Division of the North Carolina Department of Insurance, which states: “Form NC 01 86 (Ed. 7/91) was approved by the Department of Insurance for use by companies for renewal business.”
Form NC 01 86 as revised in conjunction with the 1991 amendments to N.C.G.S. § 20-279.21(b)(4) provides:
SELECTION/REJECTION FORM UNINSURED MOTORISTS COVERAGE COMBINED UNINSURED/UNDERINSURED MOTORISTS COVERAGE
Uninsured Motorists Coverage (UM) and Combined Uninsured/Underinsured Motorists Coverage (UM/UIM) and coverage options are available to me. I understand that:
1. the UM and UM/UIM limits shown for vehicles on this policy may not be added together to determine the total amount of coverage provided.
2. UM and UM/UIM bodily injury limits up to $1,000,000 per person and $1,000,000 per accident are available.
3. UM property damage limits up to the highest policy property damage liability limits are available. Coverage for property damage is applicable only to damages caused by uninsured motor vehicles.
4. my selection or rejection of coverage below will apply to any renewal, reinstatement, substitute, amended, altered, modified, transfer or replacement policy with this company, or affiliated company, unless a named insured makes a written request to the company to exercise a different option.
5. my selection or rejection of coverage below is valid and binding on all insureds and vehicles under the policy, unless a *273named insured makes a written request to the company to exercise a different option.
Having been given the opportunity to select other limits, I hereby select the Uninsured Motorists Coverage or Combined Uninsured/Underinsured Motorists Coverage limits, if any, as shown on the enclosed renewal notice, and reject any other such coverage or limits.
(If you wish to make a change or select other limits contact company/agent/telephone number)
A Named Policy/ Insured__ App. Number_
Signature_ Agent _
Date_
The only difference between Form 01 86 and Form 01 85 is that on Form 01 85 the unnumbered paragraphs after paragraph five are deleted and the following is inserted:
(CHOOSE ONLY ONE OF THE FOLLOWING)
_ I choose to reject Combined Uninsured/Underinsured Motorists Coverage and select Uninsured Motorists Coverage at limits of:
Bodily Injury_; Property Damage__
_ I choose Combined Uninsured/Underinsured Motorists Coverage at limits of:
Bodily Injury_; Property Damage_
_ I choose to reject both Uninsured and Combined Uninsured/Underinsured Motorists Coverages.
A Named Policy/ Insured_App. Number,_
Signature _ Agent_
Date_
The form sent to the insureds and executed by Bruce Fortin at the time for renewal of the policy in January 1992 provided:
*274URGENT NOTICE
State Farm Mutual Automobile Insurance Company
Selection/Rejection Form Uninsured Motorists Coverage
Combined Uninsured/Underinsured Motorists Coverage
North Carolina law states that, unless rejected, no policy of motor vehicle liability insurance shall be issued or deferred unless it contains coverage for the persons insured who are legally entitled to recover damages from owners or operators of uninsured motor vehicles. (Coverage for property damage is subject to an exclusion of the first $100,000. In addition to Uninsured Motorists Coverage (Coverage U), an optional Combined Uninsured/Underinsured Motorists Coverage (Coverage Ul) must be made available. Coverage Ul also includes underinsured motorists protection. A motor vehicle is underinsured if the liability limits of the at-fault owner or driver are less than the Uninsured/Underinsured limits of the insured’s policy. Coverage Ul can only be purchased if your liability insurance limits are greater than the minimums required by North Carolina law.
Coverage U and Coverage Ul are available with limits up to $1,000,000 per accident for bodily injury and up to the policy property damage liability limits for property damage. Coverage for property damage is applicable only to damages caused by uninsured motor vehicles.
Uninsured Motorists Coverage (UM) and Combined Uninsured/Underinsured Motorists Coverage (UM/UIM) and coverage options are available to me. I understand that:
1. the UM and UM/UIM limits shown for vehicles on this policy may not be added together to determine the total amount of coverage provided.
2. UM and UM/UIM bodily injury limits up to $1,000,000 per person and $1,000,000 per accident are available.
3. UM property damage limits up to the highest policy property damage liability limits are available. Coverage for property damage is applicable only to damages caused by uninsured motor vehicles.
*2754. my selection or rejection of coverage below will apply to any renewal, reinstatement, substitute, amended, altered, modified, transfer or replacement policy with this company, or affiliated company, unless a named insured makes a written request to the company to exercise a different option.
5. my selection or rejection of coverage below is valid and binding on all insureds and vehicles under the policy, unless a named insured makes a written request to the company to exercise a different option.
Having been given the opportunity to select other limits, I hereby select the Uninsured Motorists Coverage or Combined Uninsured/Underinsured Motorists Coverage limits, if any, as shown on the enclosed renewal notice, and reject any other such coverage or limits.
If you wish to make a change or select other limits contact your State Farm Agent.
YOUR CURRENT U BODILY LIMITS ARE $100,000/$300.000.
A Named Policy/ Insured FORTIN. TONI C. & BRUCE A. App. Number 246-7674-A26-33I
Signature_ Agent CHUCK FINKLEA Jr.
Date_
SEE REVERSE SIDE FOR IMPORTANT INFORMATION
The reverse side of the form alerted the recipient in bold letters “ACTION NEEDED”; further explained what the law required, how UM/UIM coverage protected the insured, and what options were available; and provided a table showing the premium for coverages.
In my view, the State Farm form, which included the exact same language as NC Form 01 86 and was sent to the Fortins with the policy renewal, satisfied the statutory requirements in effect in January 1992 that “[r]ejection of this coverage for policies after October 1, 1986 shall be made in writing by the named insured on a form promulgated by the North Carolina Rate Bureau and approved by the Commissioner of Insurance.” N.C.G.S. § 20-279.21(b)(4) (Supp. 1991).
Further, I cannot agree with the majority that “plaintiff did not offer [defendants] the opportunity to make a new choice regarding *276UIM coverage as required by N.C.G.S. § 20-279.21(b)(4).” The explanation of the options on NC Form 01 86 is exactly the same as on NC Form 01 85. The statute only requires that the insured be given the opportunity to select or reject other limits. Nothing in the statute suggests that the only way the opportunity to make this decision can be validly offered is by giving the insured the opportunity to fill in the blanks on a form. Like the panel of the Court of Appeals in Maryland Casualty Co. v. Smith, 117 N.C. App. 593, 452 S.E.2d 318, disc. rev. denied, 340 N.C. 114, 456 S.E.2d 316 (1995), the majority of this Court ignores the substance of paragraphs one through five on NC Form 01 86 and the language which states:
Having been given the opportunity to select other limits, I hereby select the Uninsured Motorists Coverage or Combined Uninsured/Underinsured Motorists Coverage limits, if any, as shown on the enclosed renewal notice, and reject any other such coverage or limits.
If you wish to make a change or select other limits contact your State Farm Agent.
How the language offering insureds the opportunity to select or reject different options could be any clearer is difficult to understand.
As a practical matter when a person applies for a new policy, an insurance agent is usually involved in taking the application and assisting the proposed insured in filling out the necessary forms. Hence, NC Form 01 85 with blanks to be checked and blanks where numbers are to be written is feasible. However, policy renewals are usually handled through the mail without the involvement of the insurance agent. Hence, a form which explains the options and then tells the insured in plain, easily-understood language, “[i]f you wish to make a change or select other limits contact your State Farm Agent,” is far less likely to confuse and mislead the insured. The average person, unschooled in the terminology and complexities of insurance contracts, would not be confident in filling in the blanks on NC Form 01 85 without the assistance of the individual's insurance agent.
Finally, under the majority’s interpretation of the statute, NC Form 01 86, promulgated by the Rate Bureau and approved by the Commissioner of Insurance, would have been unnecessary. Irrespective of how long the policy had been in force, an insured could not validly reject underinsured motorist coverage after the 1991 amendments without having first been furnished NC Form 01 85.
*277In sum, in my opinion, the form furnished by plaintiff to defendants in the instant case complied in all respects with N.C.G.S. § 20-279.21(b)(4), as amended, by informing defendants, in language about as simple as the statute can be explained, of the coverage they had, the new options available, and the procedure to select or reject those options. Insured’s execution of the form on 11 January 1992 constituted a valid rejection of underinsured motorist coverage. Accordingly, I vote to reverse.
Chief Justice Mitchell joins in this dissenting opinion.