Royce v. State Farm Fire & Cas. Co.Royce v. State Farm Fire & Cas. Co.
Bussiere & Bussiere, P.A., of Manchester (Emile R. Bussiere, Jr. on the brief and orally), for the plaintiff.
Primmer Piper Eggleston & Cramer, PC, of Manchester (Doreen F. Connor on the brief and orally), for the defendant.
DONOVAN, J.
[¶1] The plaintiff, Susan D. Royce, appeals a decision of the Superior Court (Will, J.) granting summary judgment to the defendant, State Farm Fire and Casualty Company (State Farm). This action concerns the extent of a waiver of uninsured or underinsured motorist (UIM) coverage in an umbrella policy. The plaintiff argues that under
I. Facts
[¶2] The following facts are taken from the summary judgment record. In October 2000, the plaintiff‘s sister, Katherine Royce, applied for a $1 million personal liability umbrella policy with State Farm. The application form included a section entitled “REJECTION OF UNINSURED/UNDERINSURED MOTOR VEHICLE COVERAGE.” In that section, Katherine checked the box next to the statement, “I reject Uninsured/Underinsured Motor Vehicle Coverage on all vehicles.” Below this box, and above a line on which Katherine signed, read another statement: “I understand that this acknowledgement of rejection will be applicable to the policy applied for, all future renewals of the policy, and on all replacement policies until I make a written request to add this coverage.”1
[¶3] Katherine submitted the application form. Shortly thereafter, State Farm approved her application and issued her a one-year umbrella insurance policy. In October 2001, State Farm renewed this policy. A month later, in November 2001, Katherine requested an increase in her umbrella liability limit to $5 million, which State Farm approved. Katherine did not sign a rejection of UIM coverage in connection with this increase to her policy limits. State Farm then renewed the umbrella policy continuously each year for more than two decades, with Katherine occasionally modifying the covered cars and drivers.
[¶4] In 2021, the plaintiff suffered significant injuries while riding as a passenger in Katherine‘s insured vehicle. The plaintiff settled her claims against the underinsured driver. She then sought UIM coverage under Katherine‘s umbrella policy. State Farm denied UIM coverage under that policy, citing the checked box on Katherine‘s October 2000 application rejecting UIM coverage.
[¶5] The plaintiff sued seeking a declaratory judgment that Katherine‘s umbrella policy “requires” UIM coverage for the plaintiff in the amount of $5 million. Following a hearing on the parties’ cross-motions for summary judgment, the trial court granted State Farm‘s motion and denied the plaintiff‘s motion. This appeal followed.
[¶6] On appeal, the plaintiff contests the trial court‘s conclusion that under
[¶7] “In a declaratory judgment action to determine the coverage of . . . [a liability] insurance policy, the burden of proof is always on the insurer, regardless of which party brings the petition.” CC 145 Main v. Union Mut. Fire Ins. Co., 176 N.H. 97, 99 (2023) (citing
[¶8]
When an insured elects to purchase liability insurance in an amount greater than the minimum coverage required by
RSA 259:61 , his uninsured motorist coverage shall automatically be equal to the liability coverage elected. For the purposes of thisparagraph umbrella or excess policies that provide excess limits to policies described in RSA 259:61 , shall also provide uninsured motorist coverage equal to the limits of liability purchased, unless the named insured rejects such coverage.
[¶9] The first sentence in the quoted excerpt above, “commonly referred to as the elective coverage provision,” seeks “to allow policy holders to protect themselves against injury from an uninsured motorist to the extent they protect themselves against liability.” Swain v. Employers Mut. Cas. Co., 150 N.H. 574, 577 (2004). The second sentence above expressly extends the requirement to provide equivalent UIM coverage to umbrella policies, absent an insured‘s rejection of UIM protection. O‘Donnell v. Allstate Indem. Co., 173 N.H. 295, 303 (2020). There is no dispute that the State Farm umbrella policy provides excess limits to a policy “described in
A. $4 Million Umbrella Limit Increase
[¶10] We begin by considering the plaintiff‘s claims pertaining to Katherine‘s $4 million increase in her umbrella liability limit. The plaintiff contends that: (1) this increase constituted a “purchase” of additional insurance; and (2) because Katherine did not reject UIM coverage when “elect[ing] to purchase” this insurance, the increase triggered the statutory mandate that State Farm provide equivalent UIM protection.
[¶11] State Farm‘s argument fails for several reasons. First, it erroneously relies on our holding in United Services Automobile Association v. Wilkinson that “umbrella-type policies” fall outside the elective coverage provision‘s scope. U.S. Automobile Assoc. v. Wilkinson, 132 N.H. 439, 448-49 (1989) (construing an earlier version of
[¶13] Accordingly, we next assess whether Katherine “elect[ed] to purchase liability insurance,” id., when she increased her umbrella limit by $4 million.
[¶14] When she contacted State Farm to request an increase in her umbrella limit, Katherine made a deliberate choice to obtain an additional $4 million in protection from pecuniary loss. Notably, this increase to the $5 million limit resulted in a recalculated premium “proportioned to the nature of the risk contemplated.” Id. We therefore conclude that when she modified her policy to quintuple her umbrella coverage, Katherine “elect[ed] to purchase” insurance. RSA 264:15, I. Our construction of RSA 264:15, I, accords with the statute‘s “plain and ordinary meaning.” Boucher, 176 N.H. at 274. It also fulfills our obligation to construe the UIM mandate liberally to effectuate its goal of compensating victims who, due to a liable driver‘s inadequate insurance, would otherwise receive scant relief. Rivera v. Liberty Mut. Fire Ins. Co., 163 N.H. 603, 608 (2012); see also 9 Steven Plitt et al., Couch on Insurance 3d § 122:39 (rev. ed. 2015) (explaining that “statutory provisions permitting rejection are to be strictly construed against waiver,” due to “the strong public policy behind uninsured motorist coverage“).
[¶15] In arguing for a contrary result, State Farm asks us to adopt the trial court‘s analysis of
[¶16] State Farm also relies, as did the trial court, on our holding in O‘Donnell that an insured‘s decrease to his or her umbrella limit did not require a fresh waiver of UIM protection. O‘Donnell, 173 N.H. at 304. There, we explained that “a change in policy limits does not preclude a finding that [a] new policy is a renewal policy, particularly when . . . there is no lapse in coverage.” Id. at 301 (quotation omitted). O‘Donnell is not controlling because it applied a post-1991 amended version of
[¶17] Finally, we note that “[t]he parties to an insurance contract may not by agreement limit the required coverage in contravention of
B. Original $1 Million Umbrella Limit
[¶18] Emphasizing that Katherine never executed a new UIM waiver after October 2000, the plaintiff also asserts that Katherine “elect[ed] to purchase” insurance when she renewed her $1 million umbrella coverage in October 2001 and at her annual renewals thereafter. Id. The plaintiff concedes that pursuant to the explanation in State Farm‘s application form that a UIM waiver extended to “future renewals” and “replacement policies,” Katherine waived UIM coverage with respect to renewals of the $1 million umbrella limit. The plaintiff contends, however, that notwithstanding this waiver, the 1991 version of
[¶19] On this point, we find the legislature‘s use of the word “elects” noteworthy. Unlike her purchase of an added $4 million in protection, Katherine‘s yearly renewals of her original $1 million in umbrella insurance did not represent a “deliberate choice” to obtain coverage or require her to take a meaningful “course of action.” Oxford English Dictionary, https://www.oed.com/dictionary/elect_v?tab=meaning_and_use#5816690 (last visited July 22, 2026). Rather, Katherine‘s October 2001 renewal merely sustained the $1 million in umbrella coverage she had purchased the previous year, as did her subsequent renewals of this original $1 million in coverage. As the trial court put it, these renewals were “administrative in nature,” and “[n]othing in the statute suggests that routine acts such as premium payments or policy renewals that do not launch a new contractual relationship . . . represent a new election to purchase insurance.” We therefore conclude that Katherine‘s UIM waiver remained effective as to the original $1 million coverage that she purchased.
III. Conclusion
[¶20] In sum, we conclude that under the 1991 version of
Reversed and remanded.
MACDONALD, C.J., and COUNTWAY and GOULD, JJ., concurred.