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Arn v. McLean2/18/2005
be implied by operation of law. There was also no longer any need for an offer or a rejection of the coverage. Therefore, State Farm acted appropriately in instructing the insured that UM/UIM coverage was not provided but could be purchased if the insured contacted an agent.
{ } As we mentioned earlier, State Farm included the following paragraph on the February 21, 2002 renewal certificate:
{ } "You have been provided the opportunity to purchase Uninsured Motor Vehicle Coverage, including underinsured motor vehicle protection in an amount equal to your limits for bodily injury liability coverage. A named insured or an applicant has declined to purchase Uninsured Motor Vehicle Coverage (including underinsured motor vehicle protection). If you want to purchase Uninsured Motor Vehicle Coverage or have questions, please contact your agent."
{ } This language was not present on prior renewal certificates that State Farm sent to the McLeans. Furthermore the February 21, 2002 renewal certificate did not list UM/UIM coverage. Instead, under "Coverages and Limits," the February 21, 2002 renewal certificate contains only the following notation: "L. Personal Liability $1,000,000. Self Insured Retention None."
{ } The McLeans contend that this was not a sufficient change to the policy because their prior rejections of UM coverage, in 1989 and 1997, were ineffective. We disagree. In our opinion, prior rejections or coverage imposed by operation of law were irrelevant, because State Farm had no obligation to offer UM coverage and there was no need for either a written offer or a rejection when the policy was renewed in February, 2002. On its face, the policy did not contain UM/UIM coverage and, in fact, had never contained UM/UIM coverage. The only way such coverage might have been in effect previously was through a legal fiction adopted by courts -- a fiction that was no longer viable in February 2002. Whether one wants to consider the statement on the renewal certificate a change or simply a return of the policy to what it always was before the many amendments to the UM statutes, the fact is that the insured was clearly informed that the policy did not contain UM/UIM coverage.
{ } Furthermore, the statement on the renewal certificate was factually true on its face. Previously, on February 21, 1989, Terence McLean signed an application for umbrella coverage. Terence is listed as the applicant, and Carol McLean is listed as his spouse. As the applicant, Terence also signed a rejection of UM/UIM coverage, stating:
{ } "In keeping with the laws of my state, I have been offered the opportunity to 1) purchase Uninsured Motor Vehicle coverage and 2) purchase Uninsured Motor Vehicle coverage in an amount equal to the Uninsured Motor Vehicle coverage limit of this application. I hereby reject the opportunity to purchase these policies as part of this application."
{ } Subsequently, the policy was issued without UM/UIM coverage and continued to be issued without such coverage until the accident in July 2002. In April 1997, both Terence and Carol McLean signed another written rejection form, stating that they had been offered the opportunity to purchase UM/UIM coverage in an amount equal to the limits of their personal liability coverage, and that they rejected the coverage on all vehicles. The form also stated that it applied to the present policy, current and future renewals of the policy, and all replacement policies unless the insured made a written request to change this coverage.
{ } Again, whether these rejections might have been effective prior to S.B. 97 is not the point. In order to hold that UM/UIM coverage existed in the
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