New Hampshire Supreme Court: Geico’s Underinsured Motorist Provision Struck Down
In a pivotal ruling on October 25, the New Hampshire Supreme Court declared that Geico General Insurance Co.’s contractual limitation requiring policyholders to seek underinsured motorist benefits within three years of an accident violates public policy. This decision arises from a case involving Shane and Maura Pelissier, who were involved in a July 2017 auto accident.
The Pelissiers initially pursued a claim against the other driver while unaware that their liability coverage was insufficient to cover their medical costs. It wasn’t until November 2021, four years post-accident, that they informed Geico of their intent to file for underinsured motorist benefits. Geico denied the claim based on its three-year filing deadline tied to the accident date, arguing that the policy was reasonable and adhered to New Hampshire law.
However, the court countered that such a provision could force insureds to file for benefits before they are even aware of their right to make a claim, thereby limiting access to benefits they would otherwise receive. The court emphasized that the intent of the state’s uninsured motorist statute is to place victims in a position akin to if the at-fault driver had adequate liability coverage.
The trial court had previously sided with the Pelissiers, stating that the Geico provision impermissibly restricts their rights. The Supreme Court upheld this ruling, concluding that the contractual limitation interfered with the proper accrual of a breach of contract claim, given that an insured’s right to claim underinsured motorist benefits only arises after an insurer denies coverage.
This landmark decision reinforces the protections for insured individuals, ensuring they retain rights comparable to those who are involved in accidents with properly insured motorists.
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