The Maryland Court of Appeals issued an opinion addressing when the statute of limitations begins to run against an insured motorist in an underinsured motorist claim against their insurance company. The case arose after an underinsured at-fault motorist offered $20,000 to an insured car accident victim. In April 2011, the plaintiff was braking her vehicle as she approached slowing traffic when the underinsured driver rear-ended her. After the initial collision, the plaintiff hit her brakes, but the driver slammed into her for a second time. The plaintiff suffered serious injuries and required several years of medical treatment.
The rear-end driver was underinsured, and her liability insurance covered up to $20,000 per person in bodily injury coverage. The plaintiff had uninsured and underinsured motorist coverage (UIM) of up to $300,000 per person. Two years after the accident, the at-fault driver’s insurance company offered the plaintiff $20,000 to release all claims against them, on the condition that the victim’s insurance company would waive its right to subrogation. Her insurance company agreed and began settlement negotiations. In January 2015, the plaintiff sent a formal demand letter to her insurance company requesting recovery under her UIM benefits. The company acknowledged receipt and notified her that a review was pending and requested additional medical documents. The insurance company contacted the plaintiff’s attorney in February, March, April, and June, to follow-up on its request. During this time, the insurance company did not deny the plaintiff’s claim.
In 2016, the plaintiff filed a lawsuit against the insurance company seeking the balance of unpaid damages not covered by the at-fault driver’s insurance company. The insurance company filed a motion to dismiss, claiming that the lawsuit was time-barred because the three-year statute of limitations had passed.
Maryland motorists involved in an accident with an uninsured or underinsured motorist can file a civil tort action against the at-fault motorist, a contract action against their own insurance company, or both. In cases where the insured’s claim is based on a contract dispute, the statute of limitations begins to run when the insurer breaches the terms of the contract. When an insured extends policy limits, complies with statutory requirements, and makes a demand on the policyholder, the statute of limitations does not begin to run against the insured until the company denies the claim. A breach of contract occurs only upon denial of the claim.
In this case, the court found that the two parties’ communication dates were irrelevant because the plaintiff only requested payment in January 2015, and nothing on the records indicated that the insurance company denied her request. However, the court did conclude the plaintiff’s claim was not time-barred because, the insurance company did not deny her claim for benefits more than three years before her lawsuit.
Have You Been Involved in an Accident with an Underinsured Motorist in Maryland?
If you or someone you know has suffered injuries in a Maryland car accident, contact the attorneys at Lebowitz & Mzhen, Personal Injury Lawyers. The attorneys at our law firm have decades of experience successfully resolving cases on behalf of our clients. We represent clients in their claims against negligent individuals and companies, as well as their insurance companies. Our attorneys possess both the in-depth legal knowledge and trial skills these cases require. Contact our office at 800-654-1949 to schedule a free initial consultation with a lawyer on our legal team.