Insurance Companies Stemming the Tide in UM/UIM Class Actions

April 4, 2011Articles Bloomberg Law Reports

The insurance industry has faced several well-publicized challenges in recent years, including global warming’s effect on climate change, the economy’s impact on automobile ownership and the housing market and the stock market collapse’s impact on insurers’ own investments. However, the insurance industry is beginning to stem the tide against a less publicized but equally significant threat – class action lawsuits. A recent string of court rulings in Alabama, Delaware and Ohio in putative class action lawsuits are representative of evolving strategies which insurers are utilizing to win more class actions. In the cases discussed below, the plaintiffs challenged insurers’ failures to disclose allegedly illusory uninsured/underinsured motorist (UM/UIM) coverage, but the outcomes demonstrate that the insurance industry is gaining momentum by structuring defenses based on local regulatory commissions’ approvals of rates and contract language pursuant to the “filed rate doctrine,” applicable statutes of limitations and the insurers’ limited duties to disclose.