The General Assembly Has Amended 18 Del. C. §3902(b)(2) And The Definition Of UIM To Allow UIM Coverage Where Liability Policy Limits Are Equal To Or Even Greater Than The Insured’s UIM Policy Limits
Under the new Underinsured motor vehicle, “[a]n underinsured motor vehicle is one for which there may be bodily injury liability coverage in effect, but the limits of bodily injury liability coverage under all bonds and insurance policies applicable at the time of the accident total less than the limits provided by the uninsured motorist coverage are less than the damages sustained by the insured.”
The purpose of this amendment is to allow insureds involved in motor vehicle collisions to access their own underinsured insurance benefits in circumstances where the insured’s damages are greater than the amount of the negligent driver's insurance policy limits. Delaware courts have ruled that if the insured and the negligent driver have the same policy limit or the insured's policy limits are less than the negligent driver's, then the negligent driver is not considered "underinsured" even if the negligent driver's policy limit is inadequate to compensate the insured. This statutory amendment will abrogate Nationwide Mut. Ins. Co. v. Williams, 695 A.2d 1124 (Del. 1997). The provisions of the law will not affect existing insurance policies, and will apply only to renewing or new policies that become effective six (6) months after the law is enacted. This new definition applies to all policies issued/renewed after January 3, 2014.