Setoffs for Multiple UM Settlements

In the case of Liberty Mutual v. Jeffrey H. Wolfson, Case Numbers 4D18-3652 and 4D19-118 (Fla. 4th DCA June 24, 2020), Florida’s Fourth DCA held that there is a setoff for settlements when a plaintiff is covered by more than one UM policy.

What Happened In The Case?

Wolfson was injured in a case accident with an underinsured motorist. Wolfson filed claims under more than one UM policy that applied to him and his claims were denied. Thereafter, Wolfson filed a lawsuit against the insurance companies for breach of contract.

In the case, the insurers stipulated to liability of the underinsured driver and the case went to trial solely on damages. The jury awarded approximately $1.5 million.

Nationwide (one of the UM insurers) settled for $100,000 and AIG settled for $480,667.50. The question here is whether Liberty Mutual gets credit for the settlements made with Nationwide and AIG.

The Fourth DCA held that multiple UM policies “duplicate” benefits and, therefore, there is a setoff for settlements made with other UM carriers.

Section 627.727(1), Fla. Stat. states that “[t]he coverage described under this section shall be over and above, but shall not duplicate, the benefits available to an insured …”

The court found that the term “similar law” applies to UM coverage and used such term to hold that multiple UM policies are “duplicative” and, therefore, Liberty Mutual was entitled to a setoff for the two other UM settlements with Nationwide and AIG.

Application of the Case

When dealing with multiple insurance policies that cover the same event, one of the first things to look at is going to be the priority of policies. One policy may be primary with another one as excess. On the other hand, multiple policies covering the same insurable event may be pro-rata with each other.

You can also have a combination where, for example, one policy may be primary while two excess policies are pro-rata.

Regardless of the pathway, there has to be a process for a setoff when more than one insurance policy covers the same event. For a pro-rata policy, the setoff comes in the form of only being responsible for a pro-rata share of responsibility. For an excess policy, payment of the underlying policy is a condition precedent to the application of the policy.

Get Advice From A Car Accident Attorney About Uninsured Motorist Coverage In Florida

All of the answers to many questions of uninsured motorist claims cannot be found in the policies themselves. Many questions are answered by court decisions in real life cases as to what policy or statutory language means. To find out how Florida law applies to your UM case, contact Russo Law to discuss your legal issue with an attorney. A consultation with a Lakeland car accident lawyer is free. Call today to schedule your free consultation.

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