State Farm Mut. Auto. Ins. Co. v. Wannamaker

Decision Date16 March 1987
Docket NumberNo. 22684,22684
Citation354 S.E.2d 555,291 S.C. 518
CourtSouth Carolina Supreme Court
PartiesSTATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. William E. WANNAMAKER, Individually and as Administrator of the Estate of Janet Lynn Wannamaker, Deceased, and Fannie P. Wannamaker, Respondents.

William W. Kehl of Wyche, Burgess, Freeman & Parham, Greenville, for appellant.

Ernest J. Howard of Howard, Howard, Francis & Reid, Greenville, for respondents.

PEEPLES, Acting Associate Justice:

State Farm Mutual Automobile Insurance Company (State Farm) brought a declaratory judgment action to determine if underinsured motorist coverage was available to the respondents under two automobile insurance policies issued to Wannamaker by State Farm, and, if so, whether the underinsured coverage could be stacked. The parties entered into a stipulation and State Farm moved for summary judgment. The trial court denied the motion and, finding no further material issues of fact in the case, held respondents were entitled to underinsured motorist coverage but were not entitled to stack the coverage. We affirm.

On August 19, 1984, William E. Wannamaker (Wannamaker) received a renewal premium notice accompanied by a nine-page booklet from his insurer, State Farm. He admittedly did not read the booklet. Thereafter, Wannamaker went to his State Farm agent's office to pay the premium to renew his existing policies.

On September 24, 1984, Wannamaker's daughter was killed in a car wreck that did not involve either of his insured vehicles. Wannamaker contends that underinsured motorist coverage should be available notwithstanding the fact that he never contracted to purchase the coverage from State Farm because it was never offered to him. State Farm asserts its policies with Wannamaker do not include underinsured coverage because it effectively offered the coverage which was declined. At issue is whether or not the nine-page booklet constituted an effective offer of underinsured coverage. We find that it did not.

Pursuant to S.C.Code Ann. § 56-9-831 (Supp.1986), the General Assembly mandated that insurance carriers shall offer underinsured coverage to its policyholders, stating:

Such carriers [automobile insurance] shall also offer, at the option of the insured, underinsured motorist coverage up to the limits of the insured liability coverage to provide coverage in the event that damages are sustained in excess of the liability limits carried by an at fault insured or underinsured motorist (emphasis added).

Construing this statute, this Court held "underinsured motorists coverage in any amount up to the insured's liability coverage must be offered to a policyholder." Garris v. Cincinnati Insurance Company, 280 S.C. 149, 154, 311 S.E.2d 723, 726 (1984). (emphasis added). Neither the statute nor any South Carolina case has specified the form or manner in which insurers must offer underinsured motorist coverage to its policyholders. However, it is clear from the language of the statute that the burden is on the insurer to effectively transmit the offer to the insured.

The legislature further required that the insured shall have the option of accepting or rejecting the offer. We hold the statute mandates the insured to be provided with adequate information, and in such a manner, as to allow the insured to make an intelligent decision of whether to accept or reject the coverage. See Hastings v. United Pacific Ins. Co., 318 N.W.2d 849 (Minn.1982); Cloninger v. National General Ins. Co., 109 Ill.2d 419, 94 Ill.Dec. 549, 488 N.E.2d 548 (1985).

In Hastings, supra, the Supreme Court of Minnesota formulated a standard by which to determine whether an insurer has complied with its duty to offer optional coverages. In summation, the standard in Hastings provides: (1) the insurer's notification process must be commercially reasonable, whether oral or in writing; (2) the insurer must specify the limits of optional coverage and not merely offer...

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74 cases
  • Thomas v. William Ray Mcdermitt & State Farm Mut. Auto. Ins. Co.
    • United States
    • West Virginia Supreme Court
    • 26 November 2013
    ...form, the Supreme Court of South Carolina concluded that the underlying common law standards of State Farm Mutual Automobile Insurance Co. v. Wannamaker, 291 S.C. 518, 354 S.E.2d 555 (1987), the South Carolina equivalent of Bias, were still available to determine the efficacy of an offer wh......
  • Grinnell Corp. v. Wood
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    ...adopted a four-part test for determining the sufficiency of an offer of additional UM and UIM in State Farm Mutual Auto. Ins. Co. v. Wannamaker, 291 S.C. 518, 521, 354 S.E.2d 555, 556 (1987). The court elucidated that an offer of additional UM and UIM coverage is meaningful if: (1) the insu......
  • Westfield Ins. Co. v. Paugh
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    • U.S. District Court — Northern District of West Virginia
    • 29 September 2005
    ...manner, so as to provide the insured with adequate information to make an intelligent decision. State Farm Mutual Automobile Insurance Co. v. Wannamaker, 291 S.C. 518, 354 S.E.2d 555 (1987). The offer must state, in definite, intelligible, and specific terms, the nature of the coverage offe......
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    ...as to allow the insured to make an intelligent decision of whether to accept or reject the coverage." State Farm Mut. Auto. Ins. Co. v. Wannamaker, 291 S.C. 518, 354 S.E.2d 555, 556 (1987). Stated otherwise, "the insurer's offer of UIM coverage must be ‘meaningful.’ " Cohen v. Progressive ......
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