Gibson v. State Farm Mutual Automobile Insurance Co., No. 20-1589 (3d Cir. 2021)Annotate this Case
Basic underinsured motorist (UIM) coverage is equal to the policy's bodily injury limits; Pennsylvania insureds can reduce costs by making a “request in writing” for lower UIM coverage. Gibson signed a State Farm (SF) insurance application for bodily injury coverage of $250,000 with $100,000 in stacked UIM coverage; for the Gibsons' three cars, the total UIM coverage described was $300,000. The application's signature block attested that “the limits and coverages ... were selected by me”; the last page referenced other “required” documents, including an acknowledgment of UIM coverage selection. SF did not provide those additional forms. Gibson was seriously injured in an accident. Weeks later, Gibson returned to SF and signed the form, stating that UIM benefits “are available with limits up to the Liability Coverage limits for bodily injury” and that she had selected “lower limits of $100,000 (per person)/$300,000 (per accident).”
Gibson sued for UIM coverage, breach of contract, and bad faith, demanding “the maximum amount of UIM coverage,” of “$300,000.” A Magistrate granted SF summary judgment on the bad faith claim. A jury awarded Gibson $1,750,000. SF moved to mold the verdict to the UIM policy limit, $300,000, listed on the application and in the complaint. Gibson successfully cross-moved to mold the verdict to $750,000 (the $250,000 bodily injury limit stacked for three cars), arguing that the application to elect a lower UIM policy limit did not comply with Pennsylvania’s Motor Vehicle Financial Responsibility Law. The Third Circuit reversed. The statute’s minimal requirement of a “request in writing” for the lower optional UIM coverage was met. The court affirmed the dismissal of the bad faith claim.