Iowa Supreme Court Reaffirms 2-year Insurance Claim Deadline

It has been ruled that Iowans will need to file claims and law suits their insurers within 2 years of having been in an accident. While discovering the full extent of an injury sustained might take longer, claims will need to filled out within this time period.

The Iowa Supreme Court ruling pertains to underinsured motorist coverage in particular. This ruling came about when Karen Robinson sued Allied Property and Casualty Insurance Company.

According to the DesMoinesRegister, she sustained an injury to her neck, which would prove to be persistent. While her accident was in 2004, it wasn’t until three years later that doctors determined the proper course of action would be surgery. Despite other treatments, the surgery seemed to do the trick. However, there is still the matter of the lawsuit.

Robinson filed a $100,000 lawsuit against State Farm, the at-fault driver’s insurance carrier, in a timely manner. The problem arose when she tried suing her own insurance company, Allied, for the full benefits of $50,000 under her underinsured motorist coverage.

The Two-Year Limitation

Despite the caveat in her insurance policy stating that claims would need to be filed within two years, Robinson retained that it wasn’t enough time. It wasn’t enough time to discover the damages, or the correct treatment. Therein lies the rub.

Chief Justice Waterman states, “If we were to adopt Robinson’s position, insurance underwriters would have to assume going forward when setting (UnderInsured Motorist) rates in Iowa that two-year contractual limitation periods would be unenforceable whenever the insured can argue he reasonably did not realize his claim would exceed the underlying liability limits.”

There was also a two-year deadline for tort-related lawsuits prior to this, establishing some precedent for this ruling.

In addition, ruling in favor of Robinson could mean higher insurance rates for the rest of Iowa drivers. It would set a dangerous precedent, because drivers could then file a claim well past the two-year deadline. It could be seven years down the line, and drivers would be able to sue for underinsured motorist benefits under the pretext of not knowing the full extent of the injuries sustained.

To avoid this it is sometimes necessary as well as prudent to file a claim with both the at-fault driver’s insurance company and one’s own. Underinsured Motorist coverage is supposed to be there to take care of any lingering expenses after the at-fault driver’s policy limits have been exhausted.

To learn more about Iowa state car insurance regulations as well as keep up with new laws, please visit our website.

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