A recent case decided by the Maryland Court of Appeals addressed the issues of whether an insurance company may waive its right to receive written notice of a settlement offer from a motor vehicle insurance liability insurer, as required under Md. Code Ann., Ins. § 19-511, and whether the insurance company must demonstrate prejudice in order to deny uninsured/underinsured (UM/UIM) motorist coverage to its insured in cases where it did not consent to the settlement offer.
Woznicki v. GEICO Gen. Ins. Co., 115 A.3d 152 (Md. 2015) involved two car accident cases with the same issues presented to the court. In the first case, Woznicki received an offer from the at-fault driver’s insurance company for its policy limits ($20,000), in exchange for her release of all liability claims against it and its insured. Pursuant to the terms of her insurance policy, as well as Md. Code Ann., Ins. § 19-511, Woznicki was required to notify GEICO in writing of any settlement offer and obtain consent from GEICO before agreeing. While Woznicki’s attorney did provide written notification to GEICO of the settlement and request for consent, it was sent on the same day that Woznicki had signed the release accepting the settlement offer from the liability insurer. Woznicki argued later at trial that her attorney had obtained an oral consent to settle when he spoke with a GEICO claims representative on the phone. Nevertheless, although Woznicki’s policy with GEICO provided UM/UIM coverage of $300,000, GEICO denied her claim because of her failure to obtain its consent to settle with the at-fault driver’s insurance company. The second case also involved a plaintiff who accepted the tortfeasor’s liability coverage before her insurance company consented to the offer.
Md. Code Ann., Ins. § 19-511 outlines the settlement procedures that affect an insured’s right to UM coverage from his or her insurance company. Under Maryland law, insureds are required to send a copy of any written settlement offer from the other driver’s insurance company to their own insurance company, if the amount of the settlement offer would exhaust the limits of the driver’s policy. The insurance company must then provide its written consent or refusal within 60 days.
In Woznicki v. GEICO, the Maryland Court of Appeals held that § 19-511 does allow an insurance company to waive its right to receive notice and consent of a settlement offer. However, in this case, the court found that GEICO did not waive its right via an oral phone conversation between an unidentified representative and Woznicki’s attorney. Essentially, the court’s ruling indicates that a more detailed and specific waiver of rights is necessary to extinguish the statutory and contractual obligations imposed on an insured.
The court also held that insurance companies are not required to demonstrate prejudice in order to deny UM/UIM coverage for their insured’s failure to comply with the consent to settle provisions. In other words, if an insured fails to obtain consent from his or her insurance company before settling with the liability insurer, his or her insurance company can deny benefits without regard to whether it was actually disadvantaged by the insured’s failure to obtain timely consent.
Woznicki v. GEICO demonstrates just how important it is to have a knowledgeable car accident attorney to represent you during insurance settlement negotiations. The Maryland attorneys at Foran & Foran, P.A. assist clients in pursuing a variety of personal injury claims, including auto accidents, medical malpractice, workers’ compensation, and more. Schedule your consultation with our experienced legal team at (301) 441-2022 or online.
More Blog Posts:
Court of Appeals of Maryland Finds Underinsured Motorist Policy Applicable in Single Vehicle Car Accident Settlement Case, Maryland Personal Injury Blog, published July 15, 2015
Wrongful Death Caused by Intoxicated Driver, Maryland Personal Injury Blog, published December 23, 2011