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Farm Bureau avoids obligation under Underinsured Motorist policy

Timothy Dawson bought $100,000.00 of Underinsured Motorist (UIM) Coverage from Farm Bureau in his auto no fault insurance policy.  Later, he was hurt by a drunk driver who had purchased only $20,000.00 of liability coverage.  Under the terms of the Farm Bureau UIM policy, Farm Bureau reserved the right to consent to any settlement with the at-fault driver and was not bound by any judgment Dawson might obtain against the driver.

When the at-fault's insurer offered its $20,000.00 policy to Dawson, Farm Bureau refused to consent to the settlement.  The parties then went to trial and the at-fault and his insurer essentially "rolled over" and consented to a judgment in the amount of $100,000.00.  The Court of Appeals panel, which included Henry Saad and Kirsten Frank Kelly--two judges who never rule against insurers--overturned the lower court's decision that the $100,000.00 judgment against the at-fault was a binding determination of Farm Bureau's obligation to its insured, Dawson.  Instead, regardless of Farm Bureau's lack of good faith in consenting to a settlement with the at-fault, Dawson must pursue a second lawsuit to completion--against Farm Bureau.
Thompson O’Neil, P.C.
309 East Front Street
Traverse City, Michigan 49684
Toll Free: 1-800-678-1307
Fax: 231-929-7262