Am. States Ins. Co. v. LaFlam, No. 11-1562 (1st Cir. 2012)Annotate this Case
Defendant was injured in 2007 while driving an automobile insured under an ASIC policy that indemnifies against injuries caused by negligent uninsured or underinsured motorists. After determining that the tortfeasors were underinsured, defendant received authorization from ASIC to settle pursuant to Rhode Island's UM/UIM insurance statute, R.I. Gen. Laws 27-7-2.1. Within three months, defendant and the tortfeasors agreed to a settlement of $1 million. ASIC refused to pay under the UM/UIM provisions and sought a declaratory judgment that the claim did not comply with a policy requirement that a claim be made within three years after the date of the accident. The district court granted ASIC judgment on the pleadings. The First Circuit certified to the state supreme court the question of whether the policy limitation is enforceable under state law. The court noted that, by requiring the three-year limitations period to run from the date of the accident, the policy may require some insureds to file suit before their claims are ripe--before the insurer determines whether it will cover the claim. The limitations period may even require some insureds to file suit before it becomes clear that the tortfeasor is underinsured.