Iverson v. State Farm Mutual Insurance Co.
2011 UT 34
| Utah | 2011Background
- Iversons were State Farm insured for over twenty years with multiple policy number changes; no written UIM waiver was ever obtained from Carter or Glenada despite post-2001 policy changes.
- Iversons were killed in July 2005 in a head-on collision involving an underinsured motorist; Iversons sought UIM coverage equal to liability limits ($50,000 per person, $100,000 per accident) but State Farm offered $20,000.
- In February 2001 and in renewal notices through 2005, State Farm sent UM/UIM cost and benefit information inserts.
- In August 2001 State Farm changed its Policy Booklet Form and added a new policy number; 2003 added a vehicle, and 2005 there was a death; the policy changes occurred after January 1, 2001.
- The federal district court asked Utah Supreme Court to decide whether lower UIM limits may comply with Utah’s UIM statute, given whether a new policy was created after January 1, 2001 and whether waiver is required.
- Court clarifies that “new policy” includes both new contractual relationships and material changes that alter the risk relationship between insurer and insured.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What triggers the UIM notification requirement after January 1, 2001? | Iversons contend the policy changes created a new policy requiring a waiver. | State Farm asserts no new policy was created, so waiver not required. | A policy is new for UIM purposes if a new contract is formed or material changes alter risk. |
| What constitutes a “new policy” under the statute? | Broader reading: new policy includes material changes to an existing policy. | Narrow reading: only new contractual relationships trigger requirements. | New policy includes new contract or material changes that alter the risk relationship. |
| When is a change to an existing policy considered material enough to create a new policy? | Changes (e.g., booklet, new policy number, new vehicle) may be material. | Materiality depends on circumstances; not every change creates a new policy. | Materiality judged by totality of circumstances; factors include whether insured requested change, likelihood of reevaluating risk, and perception of a new policy. |
Key Cases Cited
- Tipton v. General Security Indem. Co. of Ariz., 2007 UT App 109, 158 P.3d 1121 (Utah Court of Appeals 2007) (informational purposes of UIM/UM and waiver expectations; legislative history cited)
- Egbert v. Nissan N. Am., Inc., 2010 UT 8, 228 P.3d 737 (Utah 2010) (principles for interpreting statutes on certification and record)
- Li v. Enter. Rent-A-Car Co., 2006 UT 80, 150 P.3d 471 (Utah 2006) (statutory interpretation context; plain language and harmonization)