Earlier this month, a state appellate court issued a written opinion in a car accident case, holding that a plaintiff’s failure to file her claim within the three-year period outlined in the policy contract was excusable because the insurance contract was internally contradictory. In the case, State Farm Mutual Auto Insurance v. Jakubwicz, the court held that any inconsistency in an insurance contract should be construed in favor of the insured, and State Farm should have allowed the plaintiff’s claim.
Jakubwicz and her two sons were in an accident involving another motorist. Jakubwicz filed a timely lawsuit against the other motorist, who was responsible for the accident. A little over three years after the accident, Jakubwicz realized that the other party’s insurance coverage was insufficient to cover the cost of her family’s damages, so she filed a claim under the underinsured motorist provision of her own policy with State Farm.
State Farm denied the claim, pointing to language in the insurance contract that requires all claims to be filed within three years of an accident. However, in response, Jakubwicz pointed to another clause in the policy indicating that State Farm will only pay out on an underinsured motorist claim when the underinsured motorist’s own insurance is exhausted.
The trial court agreed with Jakubwicz and denied State Farm’s motion to dismiss the case. However, an appellate court reversed that decision. Jakubwicz then appealed to the state’s highest court, which reversed the previous court’s decision and held that the insurance policy was ambiguous and that the ambiguity had to be resolved in favor of the insured.
The court explained that, contrary to State Farm’s arguments, the two clauses were in conflict. On one hand, a policy holder had to file all claims within a three-year period. On the other hand, no claim could be paid until the at-fault motorist’s coverage was exhausted. This can – and did in this case – create a situation in which an accident victim is waiting for the exhaustion of the at-fault motorist’s insurance before filing the claim with their own insurance company. Since the insurance policy was internally contradictory, the court had to clear up the confusion. Looking at previously decided cases, the court determined that the ambiguity should be resolved in favor of the insured.
Are You Involved in an Insurance Dispute?
If you or a loved one has recently been involved in a serious Maryland car accident, and you are currently dealing with a difficult insurance company, the attorneys at Lebowitz & Mzhen would like to help. It may be that you are entitled to significant compensation, but the insurance companies involved are attempting to limit or prevent your recovery. The skilled personal injury attorneys at Lebowitz & Mzhen have decades of experience dealing with difficult insurance companies. If an agreement cannot be reached, they are not afraid to take a case to trial to seek a fair result. Call 410-654-3600 today to set up a free consultation.
More Blog Posts:
Workers’ Compensation May Be the Sole Remedy for Some, But Not All, Accident Victims, Maryland Car Accident Attorney Blog, published August 2, 2016.
Court Permits Accident Victim’s Case against Church Alleging Dangerous Placement of Parking Lot, Maryland Car Accident Attorney Blog, published July 13, 2016.