HOUSTON COURT OF APPEALS AFFIRMS SUMMARY JUDGMENT IN FAVOR OF THE INSURER BECAUSE THE INSURED REJECTED PIP AND UIM COVERAGE IN WRITING WHEN THE INSURER ISSUED THE FIRST AUTO LIABILITY POLICY
Recently, the Houston Court of Appeals [14th Dist], in Cain v. Progressive Cty. Mut. Ins. Co., Cause No. 14-12-00954-CV, 2014 WL 4638923, (September 18, 2014), affirmed summary judgment in favor of Progressive because the Insured rejected PIP and UIM coverage in writing before Progressive issued the first auto liability policy.
In May 2003, Corliss Madison obtained an auto policy from Progressive. At that time, Madison rejected in writing UIM and PIP coverage. Madison and Larry Bradford were named insureds under the policy. After the initial policy expired, Madison entered into seven more successive insurance policies every six months over the next four years. In December 2005, Madison’s son (“Coleman”) was added to the existing policy for one month and then again in April 2007 through the applicable policy period. Madison was involved in a vehicular accident in July 2007, which allegedly resulted in her death in February 2012. Madison’s husband (“Cain”) made a claim under the policy and sought UIM and PIP coverage. Progressive denied the claim.
Cain then filed suit alleging Progressive breached the insurance contract and violated the Texas Insurance Code when it denied Cain’s claim.
Progressive filed a motion for summary judgment in the trial court asserting that Madison’s written rejection in May 2003 of UIM and PIP coverage was valid and enforceable; therefore there was no UIM or PIP coverage. Further, Progressive asserted the policies entered into with Progressive after the initial policy were “renewal policies” and unless Madison requested PIP or UIM coverage in writing, Progressive was not required to provide either coverage. The trial court granted Progressive’s Motion for Summary Judgment.
In Texas, UIM and PIP coverage is mandated unless any insured named in the insurance policy rejects the coverage in writing. Further, Texas law mandates that an insurer is not required to provide either coverage in or supplemental to a “renewal insurance policy” after such coverage had previously been rejected in writing. The issue presented to the Court of Appeals was whether the addition of a named insured under the policy constituted a “material change” that created a “new policy” requiring the insurer to obtain another written rejection of UIM and PIP coverage.
Relying on several sister courts of appeals in other states, the Court found that Madison’s eighth successive policy was a “renewal insurance policy,” as it was a successive policy in an unbroken chain of coverage going back to the initial policy to which UIM and PIP was rejected in writing by Madison. The Court found that the addition and removal of vehicles from the policies and the addition and removal of Coleman as a named insured did not preclude the applicable policy from being a renewal insurance policy. The court therefore affirmed the underlying summary judgment in favor of Progressive.