Iverson v. State Farm Mutual Insurance Co., 2011 UT 34

Summary

The Supreme Court of Utah answered a certified question concerning whether an insurer may provide underinsured motorist coverage with limits lower than the insured's liability coverage. The court held that lower UIM limits may comply with Utah law if the insurer satisfies the applicable consumer-notification requirements. It further held that a "new policy" exists when a new contractual relationship arises or when material changes meaningfully alter the risk relationship between the insurer and insured.

Holdings

1. An insurer may provide UIM coverage in an amount lower than the policy's liability coverage limits if the insurer satisfies the applicable consumer-notification requirements under Utah's UIM statute.
2. A new policy exists when the insured and insurer enter into a new contractual relationship on or after January 1, 2001, or when material changes to an existing insurance contract alter the risk relationship between the insurer and insured.
3. Whether changes to an existing insurance policy create a new policy must be determined under the totality of the circumstances, with primary focus on whether the changes meaningfully alter the risk relationship between insurer and insured.

Questions Presented

1. Whether Utah law permits an insurer to provide UIM coverage with limits lower than the insured's liability coverage limits when the insurer complies with the statutory consumer-notification requirements.
2. Whether a policy is a "new policy" under Utah's UIM statute when a new contractual relationship begins on or after January 1, 2001, or when material changes to an existing policy meaningfully alter the risk relationship between insurer and insured.
3. What standard courts should use to determine whether changes to an existing insurance policy are sufficiently material to constitute a new policy requiring an affirmative UIM waiver.

Disposition

other