Iowa Supreme Court Addresses Underinsured Motorist Coverage

On June 29, 2012, the Iowa Supreme Court held a two-year limitations period for underinsured motorist (UIM) coverage contained in an insurance policy was enforceable, despite Iowa’s ten-year statute of limitations for actions on written contracts. The Plaintiff was involved in an automobile accident on June 14, 2004. As of August 1, 2004, she had incurred medical expenses of $5,111, and her physician’s opinion was that she sustained a soft-tissue neck injury that would gradually repair itself and cause no permanent restrictions.  The tortfeasor had $100,000 in liability coverage with State Farm. Unable to reach a settlement, she filed suit against the tortfeasor on October 27, 2005. Plaintiff had also resumed medical treatment due to ongoing neck and back pain. In February 2007, surgery was proposed for her condition, which she underwent on April 7. In late July 2008, State Farm offered its policy limit to settle the claim. She then notified her UIM carrier of the claim, and offered to settle it for the $50,000 UIM limit. On August 13, the claim was denied as untimely based the policy’s two-year limitation. The Court held the two-year limitations period was enforceable, even if the insured did not reasonably ascertain the full extent of her injuries within that period.

The case is Robinson v. Allied Property & Casualty Insurance Company.  Please click here to view the Court's opinion.