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Defending Against Phantom “Hit and Run” UM Claims

One fairly common scenario for uninsured motorist (“UM”) claims involves a report of a phantom “hit and run” vehicle. In defending against the phantom “hit and run” UM claims, it is important for insurance carriers to verify three threshold requirements: 1) whether there was actual physical contact between the “hit and run” vehicle and the insured’s vehicle; 2) whether the insured reported the accident to a law enforcement agency within 24 hours of the incident; and 3) whether the insured filed a statement under oath to the insurance company within 30 days of the incident.

I. Physical Contact

The “physical contact” requirement is contained within California Insurance Code §11580.2(b)(1). In order to recover UM benefits, physical contact must have occurred between the “hit and run” vehicle and the insured or insured’s vehicle. Contact can be minor and even the slightest touching is sufficient to satisfy this requirement. Orpustan v. State Farm Mut. Auto. Ins. Co. (1972) 7 Cal.3d 988, 993. In addition, the courts have expanded coverage by holding other instrumentalities, such as loose debris and rocks propelled from another vehicle, can satisfy the physical contact requirement. See Pham v. Allstate Ins. Co. (1988) 206 Cal. App. 3d 1193.

The purpose of the “physical contact” requirement is to prevent fraud and eliminate fictitious claims. Orpustan, supra, at 992. Specifically, the statute seeks to discourage claimants at fault for their own solo accidents from making up stories that a phantom vehicle caused their accident. Id. Where the “physical contact,” requirement is in dispute, it is important for insurance companies to inspect the insured’s vehicle for evidence of paint transfer and fresh damage to the vehicle.

II. Report to Law Enforcement Within 24 Hours

Even in “hit and run” accidents where there is physical contact, Insurance Code §11580.2(b)(2) establishes a 24-hour reporting requirement that must be satisfied in order for a claimant to recover UM benefits. UM claimants must report the “hit and run” accident within 24 hours to the appropriate law enforcement agency.

The legislative intent behind imposing the specific 24-hour limit is that “hit and run” drivers become increasingly difficult to locate as time goes by. Prompt reporting gives police a better chance of finding the “hit and run” driver. It also allows police and other interested parties to gather interviews and examine the presence or absence of tire marks and debris at the scene to determine if an accident did in fact occur.

However, in the event the insured fails to report the accident within 24 hours to a law enforcement agency, an insurer must show it was prejudiced by the delay in order to deny coverage. See California State Auto Assn. v. Blanford (1970) 4 Cal.App.3d 186; Beck v. State Farm Mut. Auto. Ins. Co. (1976) 54 Cal.App.3d 347.

III. Statement to Insurer Within 30 Days

Finally, within 30 days, the insured must file with his or her insurance company “a statement under oath that the insured…has…a cause of action arising out of the accident for damages against a person or persons whose identity is unascertainable and set forth facts in support thereof.” Insurance Code §11580.2(b)(2). Again, even if an insured untimely submits a statement, an insurer must show it was prejudiced by the delay in order to deny coverage. See California State Auto Assn. v. Blanford (1970) 4 Cal.App.3d 186; Beck v. State Farm Mut. Auto. Ins. Co. (1976) 54 Cal.App.3d 347.

ABOUT THE AUTHOR: Kristi Blackwell is a Partner at Tyson & Mendes. She specializes in general liability, professional liability and business litigation. Contact Kristi at 858.459.4400 or kblackwell@tysonmendes.com.

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