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Georgia Supreme Court Addresses Impact of 2008 Amendment to Uninsured Motorist Insurance Requirements

Although personal injury is generally regulated by state law, federal courts often hear such cases because of what’s known as diversity jurisdiction. That is to say, when the plaintiff and defendant are citizens of different states, the defendant may seek to transfer–or remove–the case from state to federal court. Diversity can exist even if one or both parties are a corporation or similar entity; a corporation is a “citizen” of the state where it is incorporated or has its principal place of business.

When federal courts hear personal injury cases, they must still follow the established law in the state where the plaintiff filed suit. On occasion, a federal court will ask the state’s supreme court to clarify certain questions of state law. The Georgia Supreme Court did just that in a June 17 opinion arising from a personal injury lawsuit.

Does a 2008 Law Change a Policy Issued In 2001?

The plaintiff in this case, a Georgia resident, suffered serious injuries as the result of a 2010 car accident. The plaintiff and his wife had a personal umbrella policy from Travelers. The plaintiff claimed uninsured motorist benefits under his umbrella policy. Travelers disputed this. The plaintiff Travelers in state court. Travelers, which is based outside Georgia, removed the case to federal court.

The federal court then asked the Georgia Supreme Court to answer two questions relevant to this case. Both questions related to a change in state law between the time the plaintiff first received his umbrella policy, which was in 2001, and his accident some nine years later. In 2001, Georgia law required all umbrella policies issued in the state to provide uninsured motorist benefits, even if the written terms of the contract excluded such benefits. The Georgia legislature repealed this requirement in 2008.

The plaintiff’s umbrella policy at issue here renewed annually. Thus, the federal court’s first question was whether the 2008 amendment applied to a policy renewed after the new law took effect. The Georgia Supreme Court answered that the 2008 amendment would not impair any “vested contractual rights” guaranteed under a previously issued umbrella policy. If the renewal simply carried forward the existing language of the umbrella policy, including the implied uninsured motorist coverage, then the amendment has no effect. If, however, the terms of the renewal modified the existing language to expressly exclude such coverage, then the plaintiff is out of luck. Ultimately, that’s a factual question for the federal court to determine.

The second question involved a provision of the 2008 amendment requiring insurance companies to give certain notices to their policyholders. The plaintiff argued Travelers had to give notice that uninsured motorist coverage was no longer provided under their umbrella policy. The Supreme Court answered this was “nonsensical,” as the provision in question only required insurers providing uninsured motorist coverage to inform policyholders of their “coverage options.” The 2008 amendment lifted the requirement for umbrella policies to provide any uninsured motorist coverage. The law, therefore, could not require a company to provide notice related to coverage it had no legal requirement to issue.