You Shouldn’t Have to Distrust Your Insurance Company

A November 2022 South Carolina Supreme Court case painfully illustrates a key reason why you need an experienced South Carolina car accident attorney when you're seriously hurt. The case shows how hard your own insurance can turn against you if you try to use it for a car or motorcycle accident settlement. It shows the breathtaking lengths the insurance company can go to avoid paying a settlement they owe for underinsurance coverage—to their own policyholder.

The case is called State Farm v. Windham. Before we get into it, let's talk about what “underinsurance” is and why it's so important.

A South Carolina Car Accident Attorney Can Guide You How to Maximize Your Own Insurance Policy

You may wonder what underinsurance is. It's the most important car insurance you can own. Check your policy now. If you don't have it—call your agent NOW to get as much as you can.

If you have it, you use underinsurance when you become severely injured in a car accident, and the at-fault driver's liability insurance isn't enough to pay your settlement. When you get all the liability insurance, you turn to your own insurance—which you paid the premiums for—to do what they promised to do: help you.

Sounds simple and easy, right? Here's where you learn the harsh truth: that's just not how insurance works. They make money by not paying you, even if they owe it, even if you paid for it.

Get the basics on South Carolina car accident cases. Download the FREE book I wrote as a Spartanburg, South Carolina, car accident attorney to answer questions victims ask, and questions they don't ask, but should.

The Windham Case Shows How Hard Your Insurance Company Can Fight You in an Underinsurance Settlement

Ms. Windham committed the cardinal sin—she told her own insurance company, State Farm, she needed to use their product as intended. Two things you need to know about her:

  • Ms. Windham was a loyal policyholder. She had five policies with State Farm, containing $100,000 of underinsurance coverage, called UIM.
  • She got seriously hurt in a car crash. When she settled for the entire liability limits, she turned to State Farm for help.

In response, State Farm paid her a single UIM policy, but denied coverage on the rest. Using the legal term referencing the complex process this case concerns, State Farm denied she could “stack” her policies. Stacking allows a severely injured South Carolina car accident victim to use up all their underinsurance policies until they have a full settlement, or until those policies are fully paid.

Another thing to consider: By the time the case got to the Supreme Court, over 10 years had elapsed since the crash.

State Farm fought its own policyholder in a case extending 10 years after the crash. As you'll soon find out, the fight was over a technicality in its policy. That technicality was an unclear term that State Farm wrote. Understand what this means: State Farm tried to take advantage of its own mistake to deny coverage to its own policyholder in a case stretching out for a decade.

Luckily, the Supreme Court righted that wrong.

Heard enough about the risks and hard-nosed legal tactics of an insurance company? Get your questions answered for free by me. Call toll-free at 888-230-1841 or fill out a Get Help Now Form to get your questions answered in a FREE, NO PRESSURE strategy session with a Spartanburg, South Carolina, car accident attorney.

The Facts of the Windham Case

The unfortunate Ms. Windham got involved in two crashes that weren't her fault, close together in time. The second crash brought her case to the Supreme Court. In that case, she got severely hurt driving the rental car she got from the at-fault driver’s insurance in the prior crash. Nothing in the Supreme Court opinion indicates State Farm disputes she could get a settlement using up all its policies. In fact, they paid her the limits of one underinsurance policy.

But State Farm denied coverage on the rest. Again, the insurance company doesn't seem to dispute she needs the money. It just fights tooth and nail so that she can't get it.

Here's why State Farm denied coverage on the other underinsurance policies from this serious South Carolina car accident: It claimed her rental car didn't qualify for coverage because she didn't own the car.

So State Farm forced her into court. A judge found in State Farm's favor. Ms. Windham appealed. The Court of Appeals overturned that decision in 2019. State Farm appealed to the South Carolina Supreme Court.

To decide the case, the Supreme Court had to dive into the highly technical fine details of State Farm’s underinsurance policy.

When South Carolina Insurance Policies Are Purposefully Too Confusing

Okay, so the Supreme Court didn't say that specifically, but that's what their ruling means to a regular person.

I'll spare you the boring legal details and extensive fine print of the insurance policy the Supreme Court discussed at great length. Here's what the ruling boils down to:

  1. State Farm argued Ms. Windham could stack only if she owned the car or if it was listed on the policy as her car. The Court pointed out that South Carolina law does not require you to own the vehicle to qualify for underinsurance.
  2. Ms. Windham argued because the policy defined the rental as a “temporary substitute car,” the rental took the place of an owned car while she rented it.

The Supreme Court declared this policy term “significant”: “If a car qualifies as both a non-owned car and a temporary substitute car, then it is considered a temporary substitute car only.” The Court reasoned the policy justified both denying and granting coverage, depending on how you read it. That made the policy ambiguous, which is a legal term meaning unclear, capable of more than one reasonable interpretation, or conflicting.

In other words, it was confusing.

However, the legal result was clear as a bell. The Supreme Court relied on longstanding law that when an insurance policy is ambiguous, the Court rules in favor of granting coverage. The Court allowed her to stack the coverage, giving her access to all $500,000 of the underinsurance.

You Can’t Afford to Trust Your Own Insurance Company When You Are Seriously Injured in a Car Accident

You can’t afford to trust your own insurance company when you are seriously injured in a car accident. You've got a lot at stake, and you should expect your own insurance company to stop at nothing to save its money by denying coverage—no matter how badly you need it.

Don't risk it by thinking you'll be the exception. Protect yourself and your family. Contact this Spartanburg car accident attorney by a live chat, filling out a Get Help Now Form, or calling toll-free at 888-230-1841.

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Rob Usry
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Rob is a Spartanburg personal injury lawyer. Rob also practices as a workers' compensation attorney.
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