Why a COA Opinion is Forcing Me to Change Insurance Companies | Speaker Law
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Why a COA Opinion is Forcing Me to Change Insurance Companies

Posted on Monday, May 14, 2018

Some auto insurance companies include an exclusion that lowers the amount the insured can recover for bodily injury if the injured person is a family member. The exclusion is known as the "family drop down" and it was at issue in Ruzak v USAA Insurance Agency (Docket 274993). Although this opinion was issued on June 24, 2008, it only recently came to my attention and is making me start investigating to switch auto insurance carriers from USAA to a carrier that does not include a family drop-down. The carriers known to use such a provision include USAA, Geico, Nationwide, and Farm Bureau.


This is the way the drop-down works: if your auto insurance policy contains a family drop-down, then if you pay for $300,000, $500,000, or even $1,000,000 in coverage, if a family member is injured in the accident, then the coverage for their bodily injury is dropped down to $20,000 per person and $40,000 per accident(the statutory minimum under the No-Fault Act). It may not have seemed like a big deal until I thought about the fact that I or my husband could be driving our car, get into an accident where it is our fault, causing injury to one of our daughters (ages 2 years and 3 months). Our girls' coverage for their bodily injuries would be limited to $20,000 ($40,000 per accident), even if we are paying monthly premiums for an $800,000 liability policy.


The Court of Appeals held in Ruzak that the insured had a choice to go with a different carrier, stating "there was no evidence that [the insured] had no other options regarding automobile insurance and that his only choice was to accept the terms as presented in defendant’s policy. Under a fair appraisal of the circumstances, [the insured]was free to accept the policy terms or reject them and to obtain automobile insurance through another provider."


Indeed, I do have a choice and I am choosing with my feet by taking my hard-earned premium money to a different carrier, one that does not include a family drop-down provision.

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