 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
Bowen v. Farmers Insurance Exchange5/2/1996
damages include prejudgment interest as provided under § 13-21-101. See Allstate Insurance Co. v. Starke, supra; Guin v. Ha, 591 P.2d 1281 (Alaska 1979).
The difficulty in recovering interest arises when the damage award, with accrued prejudgment interest, exceeds the policy limitations. In that case, depending on the language in the policy, the only interest that can be recovered in excess of the policy limitation may be that accruing after the amounts payable under the policy become due. See Allstate Insurance Co. v. Starke, supra; see generally G. Couch, Cyclopedia of Insurance Law § 56:15 (2d ed. 1983). Although the entire policy is not before us, the parties appear to have assumed that prejudgment interest under § 13-21-101 is part of the damages subject to the UIM policy limitation.
In my view, an insured in these circumstances should be entitled to recover from the UIM insurer interest accruing under § 13-21-101 from the date of the accident, but only to the extent the insured has purchased sufficient UIM benefits. The insured should not be able to recover any greater amount by circumventing express policy limitations on the total recovery available for damages.
The only exception would be for interest accruing after the insured is legally entitled to a recovery. For example, if the insurer refused to agree on the amount of recovery or to arbitrate after a request by the insured, the insurer would be in breach of the contract. Interest on the amount of any recovery to which the insured was entitled would then accrue under § 5-12-102(1) from the date of the breach, as the majority properly recognizes. Likewise, if the insurer delayed payment after the agreement or arbitration award, interest would accrue under § 5-12-102(1) from the date payment was due. Hence, at no time is the insurer encouraged to delay resolution in violation of the insurance contract.
Under this analysis the trial court reached the right result. It first concluded that the policy language clearly requires an agreement or arbitration award before UIM benefits are due, with interest accruing under § 5-12-102(1) from that point. This was a proper reading of the unambiguous policy provision.
The trial court further correctly reasoned that such a construction balances the respective rights of the parties. It is the insured who decides when to submit a UIM claim after an accident. If no agreement can be reached, the insured can require arbitration. All the while interest continues to accrue, but under § 13-21-101, not § 5-12-102(1). Earlier events, like the insured's demand or the insurer's refusal to pay the demand, create no breach of contract by the insurer or reasonable expectation of payment by the insured at that point. They are just steps leading to the determination expressly required in the absence of agreement: the arbitration award.
I would therefore affirm the trial court's award of interest on the judgment.
|