The Insurance Institute of Indiana, the National Association of Mutual Insurance Companies (NAMIC), and the Property Casualty Insurers Association of America (PCI) have filed a joint amicus curiae brief on a case that the groups believe could set a dangerous precedent for future emotional distress claims.
The trade associations filed the brief with the Indiana Supreme Court in State Farm Mutual Automobile Insurance Company v. Jakupko.
In the case Richard Jakupko, his wife and two children were involved in a crash that resulted in spinal cord fractures and mental injuries to Jakupko. State Farm paid the plaintiffs $1 million under the umbrella policy and $100,000 under the automobile policy for under-insured motorist (UIM) coverage. The plaintiff’s UIM limit was $100,000 per person and $300,000 per accident.
The plaintiffs brought action against State Farm for the additional $200,000 they believed was available under the UIM coverage, claiming Jakupko’s family witnessed his injuries and suffered emotional distress that led to physical problems such as inability to sleep, loss of appetite, and fatigue. The court ruled that the physical manifestations of emotional distress constitute bodily injuries that are covered in the defendant’s policy.
“While we certainly sympathize with the Jakupko family, the policy in question simply does not cover this kind of claim,” Insurance Institute president Stephen Williams said. “We believe the court overreached in this instance.”
“There is no precedent in Indiana for the appellate court’s ruling,” NAMIC’s Regulatory Affairs Counsel Marsha Harrison stated. “This decision could open insurers up to lawsuits expanding the connection this court made.”
PCI counsel Robert Hurns added, “The impact of this ruling is broader than this single case, as it has the potential to be damaging to insurers writing business in Indiana. This case could dramatically increase costs by expanding coverage beyond what the contract states.”
The Indiana Supreme Court has not set a date for arguments in this case.
The Insurance Institute of Indiana is a non-profit trade association representing 24 insurance companies and their subsidiaries in the state of Indiana. NAMIC and PCI are national property/casualty insurance trade associations based in Indiana and Illinois respectively.
Source: Insurance Institute of Indiana
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