The Signed-but-Blank UM Form
Denise Boudreaux, a single named insured in Lafayette, carries a personal auto policy with liability limits of $100,000/$300,000/$50,000. In March 2023 her agent handed her the company's uninsured/underinsured motorist selection form. Denise signed and dated it, but the line where the applicant selects a UM limit was left blank, the box for rejecting UM entirely was unchecked, and no limit was ever discussed. The declarations page nevertheless shows UM at $25,000/$50,000. In June 2024 an uninsured driver ran a red light and struck her. Her medical bills are $85,000, her documented lost wages are $12,000, and her car, which carries a $500 collision deductible, needs $9,000 in repairs. The other driver has no liability policy and no assets.
1. The adjuster says the declarations page controls and offers $25,000. Evaluate whether the $25,000/$50,000 UM limit is enforceable.
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Issue: Does an entry on the declarations page, unsupported by any completed selection form, establish a reduced UM limit?
Reasoning:
- Louisiana treats UM coverage as mandatory at an amount equal to the liability limits unless the named insured makes a written, signed, affirmative selection of lower limits or an outright rejection.
- The controlling evidence is the selection/rejection document, not the declarations entry. A declarations page is the insurer's own issuance; it does not prove that the insured knowingly chose a lower limit.
- Here the form was signed and dated, but the limit line was blank and the rejection box was unchecked. A blank form evidences no meeting of the minds on a specific lower limit. Courts facing blank or incomplete UM forms generally find no valid reduction, and the coverage defaults to the policy's liability limits.
- An insurer arguing otherwise (or seeking reformation) must prove a mutual mistake or a valid written selection. A signature on an incomplete form is weak proof of either.
Conclusion: The $25,000/$50,000 entry should not be enforced on these facts. UM defaults to $100,000 per person / $300,000 per accident. The adjuster's $25,000 offer should be resisted; the file should be documented with the blank form.
2. Assuming the UM limit is $100,000/$300,000, how much does the UM carrier owe on the bodily injury claim, and how is the $9,000 repair handled?
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Bodily injury calculation:
- Medical: $85,000
- Lost wages: $12,000
- Total damages: $97,000
Compare to the limit structure. UM is written per person / per accident; one claimant means the per-person limit of $100,000 governs. $97,000 does not exhaust the limit, so the full $97,000 is payable, reduced by nothing: the tortfeasor is uninsured, so there is no liability payment from the tortfeasor's insurer to offset.
Vehicle damage:
- Louisiana's compulsory UM requirement is framed around damages for bodily injury, sickness, disease, or death; it is not a property damage coverage. Damage to the insured's own vehicle is handled under the policy's physical damage coverage (or not at all, if none is purchased).
- With collision coverage and a $500 deductible, the collision payment is $9,000 − $500 = $8,500.
- Subrogation against an uninsured, judgment-proof driver is practically worthless, so do not net any recovery expectation against the claim.
Conclusion: UM pays $97,000 for the bodily injury claim; the car is paid under collision at $8,500 after the deductible.
3. The insurer discovers the agent's file contains a note reading 'client declined UM to save premium.' Can the company rely on that note to cut the claim to $25,000?
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Reasoning:
- The note proves, at most, an oral conversation. The statute contemplates a written selection or rejection signed by the named insured and attached to the policy or application.
- The signed form actually in the file is blank on the limit line. An internal agent memo cannot cure a defective statutory form; it would also invite an errors-and-omissions exposure against the agent if the client denies the conversation.
- Even if the client orally said she wanted to save money, no specific limit was selected, so there is no agreed-upon reduced amount to enforce. The default rule supplies the answer: coverage equals the liability limits.
Practical conclusion: Do not reduce the offer based on the note. Flag the agent's handling for E&O review, and note that the same defect would inflate UM on any other policy written with this blank form - a book-of-business review is warranted.