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Libby v. Government Employees Insurance Co.6/12/1989
s and not merely offer them in general terms; (3) the insurer must intelligibly advise the insured of the nature of the optional coverages; and (4) the insured must be advised that optional coverages are available for a relatively modest increase in premium. The Court held that, although the insurer had offered the coverage in a commercially reasonable way by including the notice in a policy renewal statement, the offer was insufficient to satisfy the statute because (a) it did not describe the limits of the optional coverage; (b) it did not mention the cost; and (c) it did not contain an intelligible description of underinsurance coverage.
Groover v. Torkell, 645 S.W.2d 403 (Tenn.App.1982), involved a Tennessee statute (T.C.A. § 56-7-1201), which provided, in pertinent part:
Effective September 1, 1974, every insured purchasing or renewing a policy of insurance under the provisions of the first paragraph of this section shall be provided an opportunity to also purchase uninsured motorist insurance limits greater in amount than the requirements of § 55-12-107.
The Court concluded that the statute was complied with if the insured knew that uninsured motorist coverage in amounts above the minimum required by law could be purchased at the time of purchasing a new policy or renewing an existing one, or at the time of any other policy change. The holding in the case was that in view of the
fact that there was evidence to the effect that the insurance company had sent the insured renewal packages containing a form advising the insured of the availability of additional coverage, the trial court had erred in taking that issue from the jury.
Delaware imposes much more stringent requirements upon insurance companies. Insurers issuing new policies must not only offer increased coverage to their policyholders, they must furnish the additional coverage unless the insured rejects it. 18 Del.C. § 3902(b). In State Farm Mutual Auto Ins. Co. v. Arms, 477 A.2d 1060 (Del.Supr. 1984), it was held that the failure of the insurer, when it rewrote an existing policy, to provide the additional coverage by offering it and including the coverage unless rejected, violated the statutory obligation. The insured's remedy was to regard the offer as continuing, so he could accept it after the accident. See also O'Hanlon v. Harford Accident and Indemnity Company, 522 F.Supp. 332 (D.Del. 1981). We find the Delaware cases to be completely inapposite to this case; the obligations imposed upon insurers by the Delaware statute are not comparable to the duties imposed by art. 48A, § 541(c)(2) of the Maryland Code.
The Maryland statute which was in effect when the policy in question was issued and which continues in effect until July 1, 1989 (see n. 2), unlike the Illinois statute and the amended version of the Minnesota statute, does not require the insurer to offer increased underinsured motorist coverage. Indeed, it does not directly require the insurer to take any specific action; it merely provides that there shall be available to the insured an opportunity to obtain such coverage. We find it particularly significant that, as originally introduced in the General Assembly during its 1981 legislative session as Senate Bill 17, the proposed act contained language to the effect that the insurer be obligated to offer the coverage. That language was stricken out and the statute, as passed, merely provided that an opportunity to purchase be available. Since there is no requirement under the Maryland statute to make an offer, the four-part
test announced by the Minnesota Supreme Court in Hastings and adopted by the Illinoi
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