Downey v. Travelers Property Casualty Insurance Co., 74 So. 3d 952

Downeys insured under Travelers UIM policy; policy excludes UIM where insured settles without insurer consent.
Downeys settled with tortfeasor (Thompson) for $10,000 on July 8, 2008, without notifying Travelers.
Travelers denied UIM benefits after Downeys’ later claim, citing Exclusion A.1 for lack of consent.
Downeys argued they didn’t know they had UIM coverage on the motorcycle and thus non-notice was excusable.
District Court certified whether ignorance of UIM coverage excuses notice or if lack of notice forfeits UIM interests regardless of prejudice.
Policy provided UIM coverage to insureds, not just to a specific vehicle; ignorance of policy terms is not a legal excuse when represented by counsel.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether failure to notify pre-settlement bars UIM benefits as a matter of law	Downeys; lack of knowledge excuses notice (perceived lack of UIM scope)	Travelers; exclusion requires consent regardless of knowledge	Yes; failure to notify forfeits UIM benefits
Whether ignorance of UIM coverage excuses non-notice	Downeys claim ignorance due to policy scope	Ignorance of policy terms is unreasonable for insured with policy possession and counsel	No; ignorance not excusable as matter of law
Effect of possession of policy and counsel on notice requirement	Downeys had policy and counsel; no excuse for non-notice	Counsel representation does not excuse notice obligation	Ignorance not an excuse; notice required; benefits forfeited

Lambert v. State Farm Mutual Auto. Ins. Co., 576 So.2d 160 (Ala.1991) (set framework for notice and consent in Lambert to protect insured and subrogation rights)
State Farm Mut. Auto. Ins. Co. v. Burgess, 474 So.2d 634 (Ala.1985) (notice issues; burden to show reasonable excuse for delay; policy principles predate Lambert)
Southern Guar. Ins. Co. v. Thomas, 334 So.2d 879 (Ala.1976) (ignorance of policy terms when represented by counsel is unreasonable)
Reeves v. State Farm Fire & Cas. Co., 539 So.2d 252 (Ala.1989) (unreasonable to rely on lack of reading the policy as excuse)
Overstreet v. Safeway Ins. Co. of Alabama, 740 So.2d 1053 (Ala.1999) (affirming denial of UIM benefits when no excuse for clandestine settlement)
Jones v. Allstate Ins. Co., 601 So.2d 989 (Ala.1992) (no reason given for non-notice)
Brantley v. State Farm Mut. Auto. Ins. Co., 586 So.2d 184 (Ala.1991) (no reason given for non-notice)
Ex parte Morgan, 13 So.3d 385 (Ala.2009) (summary judgment where insured gave no reason for limited notice)
Watson v. Alabama Farm Bureau Mut. Cas. Ins. Co., 465 So.2d 394 (Ala.1985) (reading of policy not required could be unreasonable)
State Farm Mut. Auto. Ins. Co. v. Jackson, 462 So.2d 346 (Ala.1984) (UM coverage inures to the person, not a vehicle)