Mississippi Insurance Law – Part 9
MISSISSIPPI Insurance-Related Law — An A to Z Guide
Here’s the next post sharing our 2016 update. If you like a full copy or have any questions, please email or call.
Title of Vehicle
Mississippi is a “title” state. By statute, Mississippi does not regard the sale of a motor vehicle as consummated until the certificate of title is properly transferred and delivered to the purchaser. Until this occurs, the seller is regarded as in possession of legal title to the vehicle. In this regard, Mississippi Code Annotated § 63-21-31 states in pertinent part:
(1) If an owner transfers his interest in a vehicle, … other than by the creation of a security interest, he shall, at the time of the delivery of the vehicle, … execute an assignment and warranty of title to the transferee in the space provided therefor on the certificate or as the State Tax Commission prescribes, and cause the certificate and assignment to be mailed or delivered to the transferee.
(5) … a transfer by an owner is not effective until the provisions of this section have been complied with.
See also Hicks v. Thomas, 516 So.2d 1344, 1346 (Miss.1987) (this statute “accepts certainty of title as our primary value, and provides a simple method for transferring title to motor vehicles-endorsement and delivery to the transferee of the title certificate”).
Without some special relationship, an owner of an automobile, merely by virtue of his ownership interest, is not liable for injuries negligently caused by a permissive driver. Wood v. Nichols, 416 So. 2d 659 (Miss. 1982). See also Vicarious Liability.
A towing company may recover from the insurer if the insurer takes title of the vehicle and doesn’t pay fees. An insurer may not assume or accede to title without assuming the credit obligations for towing and storage as well. Once an insurer has succeeded to title they may not abandon the vehicle without consent of the towing or storage service. Miss. Code Ann. § 83-11-301.
Unfair Claims Settlement Practices
Mississippi has not adopted the Model Unfair Claims Settlement Practices Act, but has analyzed the conformity of the Mississippi statute on mandatory policy provisions, Miss. Code Ann. § 83-9-5, with the Model Act. Lewis v. Equity Nat. Life Ins. Co., 637 So. 2d 183, 188 (Miss. 1994).
Mississippi mandates uninsured motorists (UM) coverage be provided in every policy of automobile insurance issued in the state, unless rejected in writing. Miss. Code Ann. § 83-11-101.
Mississippi law does not treat UM claims separately from underinsured motorist (UIM) claims. The statute merely defines an uninsured motorist to include the underinsured motorist.
Mississippi’s UM statute, incorporated into every policy, does not speak to accidents or negligence, but only provides that it covers “all sums which the insured is entitled to recover as damages . . . .” Miss. Code Ann. § 83-11-101. The Automobile Insurance Law and Practice treatise states that the purpose is to protect innocent insureds that are injured “as a result of the negligence of” financially irresponsible drivers. See also, Harthcock v. State Farm Mut. Auto. Ins. Co., 248 So. 2d 456 (Miss. 1971). While the UM statute does not clearly describe what constitutes an insured event, UM endorsements commonly contain a coverage provision which requires that the insured’s injuries or damages be caused by an “accident.”
Further, UM coverage must arise out of the “ownership, maintenance or use” of an uninsured vehicle. Spradlin v. State Farm Mut. Auto. Ins. Co., 650 So. 2d 1383 (Miss. 1995).
The UM statute does not mandate coverage for punitive damages that might be assessed against an uninsured motorist. State Farm Mut. Auto. Ins. Co. v. Daughdrill, 474 So. 2d 1048 (Miss. 1985). Policy language excluding punitive damages is permitted. However, if not excluded, it is covered.
NOTE: The statute does not prevent an insurer from providing greater coverage than required by the statutes. Thus, it is very important to always review both the statute and the policy. The UM statute is only the floor for coverage and the policy may grant additional benefits.
Uninsured Motor Vehicle Definition
Miss Code Ann. § 83-11-103 defines an “uninsured motor vehicle” to mean:
(1) a motor vehicle as to which there is no bodily injury liability insurance; or
(2) a motor vehicle with liability insurance, but the insurance company has legally denied coverage or is unable, because of being insolvent at the time of or becoming insolvent during the 12 months following the accident, to make payment with respect to the legal liability of its insured; or
(3) an insured motor vehicle, when the liability insurer of such vehicle has provided limits of bodily injury liability for its insured which are less than the limits applicable to the injured person provided under his uninsured motorist coverage; or
(4) a motor vehicle as to which there is no bond or deposit of cash or securities in lieu of such bodily injury and property damage liability insurance or other compliance with the state financial responsibility law, or where there is such bond or deposit of cash or securities, but such bond or deposit is less than the legal liability of the injuring party; or
(5) a motor vehicle of which the owner or operator is unknown; provided that in order for the insured to recover under the endorsement where the owner or operator of any motor vehicle which causes bodily injury to the insured is unknown, actual physical contact must have occurred between the motor vehicle owned or operated by such unknown person and the person or property of the insured; or
(6) a motor vehicle owned or operated by a person protected by immunity under the Mississippi Tort Claims Act, if the insured has exhausted all administrative remedies. No vehicle owned by the United States government and against which a claim may be made under the Federal Tort Claims Act, is considered uninsured.
Bodily Injury Definition
Miss. Code Ann. § 83-11-102 defines “bodily injury” simply by saying that it includes death resulting from such injury. This term has received little attention for the Mississippi Supreme Court. See Miss. Ins. Law and Prac. § 16:28 (citing E.E.O.C. v. Southern Pub. Co., Inc., 894 F.2d 785 (5th Cir. 1990) (noting the Mississippi Supreme Court has not defined bodily injury)).
The UM Statute separates insureds into two categories, or classes. Case law has identified the insureds as either “Class I” or Class II.” These categories are derived from the structure of the UM Statute. The statute provides that the named insured, spouse and resident relatives receive UM benefits whether they are in the insured vehicle “or otherwise.” Thus, UM is personal insurance as to these insureds and follows them wherever they go (in a car, house, walking down the street, or in a bathtub). The statute further provides that permissive drivers and guest passengers are only insureds while using the insured motor vehicle. Their benefits are attached to the vehicle they are in. To summarize: “Class I” insureds are the named insured and resident relatives, while “Class II” insureds are permissive drivers and guest passengers.
UM stacking is permitted for “Class I” insureds (named insureds and resident relatives), generally, and more limited for “Class II” (permissive drivers and guest passengers). Meyers v. American States Ins. Co., 914 So. 2d 669, 674 (Miss. 2005). Class II insureds can only stack the accident vehicles’ coverage with any of his or her own personal coverage (i.e. other coverage he or she qualifies as an “insured” on). A Class II insured does not have the right to stack an employer’s uninsured motorist coverage unless policy language provides otherwise. Deaton v. Mississippi Farm Bureau Cas. Ins. Co., 994 So. 164, 167 (Miss. 2008). Anti-stacking provisions in policies are void.
Evaluating UIM Coverage (triggering the UIM claim)
In determining whether a tortfeasor is properly considered to be an underinsured motorist with regard to a particular insured, the limits of the tortfeasor’s liability should be compared to the stacked total of UM benefits applicable to the insured. In short, compare the liability limits to the stacked UM limits. Cossitt v. Federated Guar. Mut. Ins. Co., 541 So. 2d 436 (Miss. 1989). It does not matter that a particular insured does not recover the full liability limits to determine coverage for UM. The statute only requires comparing limits to limits. For a UM claim to be valid, for policies following the Mississippi statute, the UM limits (stacked) must exceed the liability limits. If they are equal or less than then liability limits, there is no UM claim. Again, the fact that an insured may not actually receive the limits does not matter. It is a limits to limits only analysis. If a UM claim is triggered via the limits-to-limits analysis, you then determine how much UM is available under other rules, discussed below. Miss. Code Ann. § 83-11-101 et seq.
Offsets and Multiple Claims
Different from determining if UM coverage exits, the UM carrier has the right to offset liability coverage payments. If provided for in its policy, the UM insured’s carrier may only validly offset the amount of UM benefits available to the insured by the amount of liability benefits “actually received” by the UM insured. In this context, “actually received” has been defined as those amounts that are either tendered by the tortfeasor’s liability carrier or otherwise available to the UM insured. Fidelity & Guaranty Underwriters, Inc. v. Earnest, 585, 591-92 (Miss.1997). Therefore, if multiple claimants are involved and an insured does not receive the full limits available to him, the carrier can only offset those amounts received or that he could have actually received.
Priority: “Primary First” – It has been noted that the primary insurer has the right to offset its UM limits first. Dixie Ins. Co. v. State Farm Auto. Ins. Co., 614 So. 2d 918 (Miss. 1992). Check policy language to determine applicability. See Primary/Excess Issues.
An insurer may not offset MedPay payments to the insured against UM coverage limits. Prudential Prop. & Cas. Ins. Co. v. Mohrman, 828 F. Supp 432, 438 (S.D. Miss. 1993).
An insurer may not offset Workers Compensation payments to the insured against UM coverage limits. Nationwide Mut. Ins. Co. v. Garriga, 636 So. 2d 658 (Miss. 1994).
Workers Compensations liens do not apply to UM proceeds. Miss. Ins. Guaranty Assoc. v. Blakeney, 51 So. 23 208 (Miss. App. 2009). Accordingly, a carrier does not need to seek approval from a court or workers compensation commission in order to pay UM proceeds.
The law regarding exhaustion remains unclear in Mississippi. An insured may have the right to elect to pursue a claim directly against his UM carrier and forego the right to seek damages against the tortfeasor (and liability carrier). In such situations, the UM carrier does not have an offset, and must advance the total UM limits (if otherwise appropriate) and force the UM carrier to seek subrogation from the tortfeasor. Harthcock v. State Farm Mut. Auto. Ins. Co., 248 So. 2d 456, 461-62 (Miss. 1971) (insured not required to exhaust). But see Robinette v. American Liberty Ins. Co., 720 F. Supp. 577 (S.D. Miss. 1989) (enforcing policy provision requiring insured to exhaust). Make sure to consult the specific policy language regarding this issue.
If an insured does proceed to obtain the liability or other UM proceeds, he is generally not required to fully exhaust those limits. The Court in Mississippi Farm Bureau Mut. Ins. Co. v. Garrett, 487 So. 2d 1320 (Miss. 1986) held that in interpreting a requirement that an insured first obtain other “available” insurance, the term essentially implies a substantial exhaustion (i.e. having in mind the nature and extent of injuries, liability, settlement offered, and discounted by the costs and risks of seeking a greater sum).
Written Rejection/Minimum Coverage
Unless the insured rejects the coverage in writing, the policy must provide minimum UM coverage of at least 25,000/50,000/25,000. See Miss. Code Ann. §§ 83-11-101(1) and (2); 63-15-3.
The statute explains that “any insured named in the policy” can reject the coverage in writing. Miss. Code Ann. § 83‑11‑103(2). A statutorily required waiver of UM coverage can be obtained only from a fully informed insured. In other words, the waiver must be knowing and intelligent, meaning that the insured was “reasonably knowledgeable and informed of the costs and benefits of such UM coverage prior to signing the waiver.” Owens v. Mississippi Farm Bureau Cas. Ins. Co., 910 So.2d 1065, 1074 (Miss. 2005). The burden is on the carrier to demonstrate that a waiver was knowingly and intelligently made. Honeycutt v. Coleman, No. 2010-CT-01470-SCT (Miss. May 30, 2013). This can be accomplished by proof that an appropriate explanation of the ramifications of rejecting UM coverage was provided to the insured, or that the insured was a sophisticated purchaser of insurance or was otherwise informed.
Effective July 1, 2014, the UM statute was amended to create a new UM Rejection Form that, if substantially complied with, will be binding on all the insureds and would operate as an effective waiver of coverage.
There is no requirement of a written rejection of UM coverage above the minimum amount, and there is no duty on an agent to provide an explanation of such optional coverages. Owens v. Mississippi Farm Bureau Cas. Ins. Co., 910 So.2d 1065, 1074 (Miss. 2005).
The statute does not require that the written rejection be maintained. In other words, the mere fact that a carrier cannot produce the written rejection does not automatically create a violation of the statute. The carrier is free to provide affidavits or other circumstantial evidence that an insured at one time had signed a written rejection of coverage, and it is up to the insured to present proof to the contrary. Travelers v. Stokes, 838 So. 2d 270 (Miss. 2003).
Election of Remedies
If insured sued another tortfeasor, who was not an uninsured motorist, and obtained judgment for less than he sought, he cannot then claim that a different tortfeasor, who is uninsured, was actually the cause of his injuries. He is precluded from pursuing a UM claim. Carson v. Colonial Ins. Co., 724 F. Supp 1225 (S.D. Miss. 1989).
Any exclusions that limit or reduce the available UM benefits below the minimum statutory amount are likely to be improper.
“Named driver” and “owned vehicle” exclusions have been found to be in conflict with the UM Act and are void and unenforceable. Lowery v. State Farm Mut. Auto. Ins. Co., 285 So. 2d 767 (Miss. 1973) (owned vehicle); Atlanta Cas. Co. v. Payne, 603 So. 2d 343, 348 (Miss. 1992) (named driver).
However, liability offset provisions, which would serve to reduce or eliminate UM coverage, have been held to be valid. See Offsets and Exhaustion, above.
The exclusivity provision in the Worker’s Compensation statute completely bars an employee from recovering UM benefits from his personal insurer when injured by a co-employee. Wachtler v. State Farm Mut. Auto. Ins. Co., 835 So. 2d 23, 28 (Miss. 2003).
Liability Exclusions Create UM Coverage
It is important to keep in mind that any exclusion or limitation of coverage under the liability coverage will likely trigger uninsured motorist coverage. The UM Statute defines an “uninsured motor vehicle” to include motor vehicles that have no liability insurance, as well as vehicles that have liability insurance, but the carrier has legally denied coverage.
Mississippi courts have consistently held that UM must be construed from the perspective of the injured insured. So, from that view, one must look to see if tortfeasor has any liability insurance to compensate the insured’s damages. The courts have held “it is all the same to him whether there is no insurance at all, or a policy that is incapable of being applied to satisfy his claim because the tortfeasor’s insurer lawfully disclaims liability.”
Therefore, whenever there is an event that renders the tortfeasor without liability coverage (through exclusions, lack of cooperation, etc.), that will trigger an insured’s first party UM benefits. In other words, once the tortfeasor becomes uninsured for any reason, UM benefits become potentially available. This will occur even under the same automobile insurance policy, as the coverages apply separately to each insured.
Limiting Stacking – Fleet Policies
Since 2002, Mississippi has allowed a multiple-vehicle policy to limit the stacking available to the vehicles insured therein. It allowed a single fleet policy (which was a policy insuring 10 or more vehicles) to provide for a Non-Stacking, Single Limit policy, as long as that policy provided for at least 10 times the minimum limits. See § 83-11-102. In other words, up until July 1, 2013, Mississippi allowed the non-stacking of UM coverage if a single policy with multiple vehicles provided for coverage at least 250/500/250.
Effective July 1, 2013, the statute was amended to lower the 10 vehicle multiple to 4. See § 83-11-102. Carriers are now allowed to issue a single limit, non-stacking policy covering multiple vehicles as long as it provides coverage of 100/200/100. There is an Insurance Department form carriers can use to disclose the availability of this non-stacking single limit and for an insured to make selections of coverages.
Property Damage Deductible
The UMPD deductible is $200. Miss. Code Ann. § 83-11-101.
In the case of minor children of the named insured, the Mississippi Supreme Court has held them to be residents of the named insureds household as a matter of law even if they live with the named insured’s spouse under a custody arrangement. In the case of divorced parents, therefore, minor children are considered to be residents of each parent’s household as a matter of law. Aetna Cas. & Sur. Co. v. Williams, 623 So. 2d 1005 (Miss. 1993).
Hit and Run
A UM policy may include the requirement that actual “physical contact” occur between the insured and an unidentified motor vehicle.
An object that is simply thrown or tossed from one vehicle and hits the insured’s vehicle has been held not to meet the physical contact requirement as the insured vehicle was neither hit by the unknown vehicle nor was any object struck by that vehicle propelling it into the insured’s vehicle. See Aetna Cas. & Sur. Co. v. Head, 240 So. 2d 280 (Miss. 1970) (finding no physical contact in case involving a soft drink bottle being tossed by unknown operator into windshield of insured).
In many cases, however, the physical contact requirement can be met by indirect contact; that is, if the unknown vehicle is said to have contacted the insured through a medium of an intervening vehicle or object. For example, in Southern Farm Bureau Cas. Ins. Co. v. Brewer, the requirement was met when the unknown vehicle struck an object in the road thereby causing the object to be propelled into the insured vehicle. Southern Farm Bureau Cas. Ins. Co. v. Brewer, 507 So. 2d 369 (Miss. 1987). There, the Court emphasized that the injury-causing impact must have a “complete, proximate, direct and timely relationship with the first impact between the first hit-and-run vehicle and the intermediate [object]. In effect, the impact must be the result of an unbroken chain of events with a clearly definable beginning and ending, occurring in a continuous sequence.” Southern Farm Bureau Cas. Ins. Co. v. Brewer, 507 So. 2d 369 (Miss. 1987).
However, the ruling in Brewer was based on Farm Bureau’s policy language at the time. The Court stated that had the insurance company intended that the provision apply only where this is direct, as opposed to indirect physical contact, between the hit-and-run vehicle and the vehicle of the insured, it should have so provided in unmistakably clear language. Since the Farm Bureau policy was cable of two meaning, the construction most favorable to the insured was applied. Southern Farm Bureau Casualty Ins. Co. v. Brewer, 507 So. 2d 369 (Miss. 1987). Thus, in fact scenarios like Brewer, it appears that the policy language controls when deciding whether to exclude damages for indirect contract by debris propelled from a hit and run vehicle.
A word of caution is necessary whenever legal issues are at stake. The information contained in these posts is for general guidance on matters of interest only. The application and impact of laws can vary widely based on the specific facts involved. Given the changing nature of laws, rules and regulations, there may be omissions or inaccuracies in information contained in this report or laws may have changed or been reinterpreted. Accordingly, the information in this report is provided with the understanding that the authors are not herein engaged in rendering legal, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with legal or other competent advisers. Before making any decision or taking any action, particularly before denying any first-party claims, you should consult with your counsel or the attorneys at Holcomb Dunbar.