Physical Contact Rule For Uninsured Coverage

March 30, 2013

Fort Worth insurance law attorneys need to know the "physical contact" rule as it relates to coverage for uninsured (UM) coverage.
UM coverage is required pursuant to the Texas Insurance Code, Section 1952.101, unless it is rejected in writing.
Most auto insurance policies are going to include within the definition of "uninsured motor vehicle" a hit and run vehicle whose operator or owner cannot be identified. This incorporates the requirement in Texas Insurance Code, Section 1952.104, which requires "... actual physical contact must have occurred between the vehicle owned or operated by the unknown person and the person or property of the insured." The Texarkana Court of Appeals, in 1986, made clear that there is no coverage if an unidentified vehicle runs the insured off the road but does not actually hit the vehicle in the process.
As was said in by the Houston Court of Appeals in 1972, an insured may recover under UM coverage where a hit and run auto hits another auto, which subsequently hits the insured's auto. This is commonly referred to as the "indirect contact rule." This rule does not apply when an unidentified vehicle does not actually hit any car. Nor does it extend to objects left in the road.
Here is a nugget to keep in mind when making a claim for UM coverage. The Texas Insurance Code, Section1952.109, states, "The insurer has the burden of proof in a dispute as to whether a motor vehicle is uninsured."
The claimant has to prove entitlement to UM benefits by establishing the tortfeasor's negligence, the amount of damages suffered by the insured, and the fact that the tortfeasor is uninsured. This last part, "that the tortfeasor is uninsured" can be difficult at times and thus the above Section 1952.109 comes in play and puts the burden on the insurance company.
Here are some of the limitations on UM coverage to know about.
1) Courts have held that a policy does not provide UM coverage for any person for bodily injury sustained while occupying or when struck by any motor vehicle owned by the named insured or any family member who is not insured for UM coverage under the policy.
2) The "named driver" exclusion has been held to be valid and enforceable. The courts have found this exclusion furthers public policy by enabling drivers with family members having poor driving records to secure affordable insurance. Moreover, it deters drivers from entrusting their vehicles to unsafe excluded drivers. The named driver exclusion operates to preclude coverage regardless of whether the use of the covered auto by the excluded driver is authorized by the insured or not.
3) Additionally, the Fort Worth Court of Appeals held in 1995, that the named driver exclusion bars coverage for negligent entrustment claims against policyholders.
To make sure all avenues are exhausted, an experienced Insurance Law Attorney should be consulted.