Expert Commentary

Need Does Not Create Coverage

Herman Duke and Gayle Duke appealed a summary judgment granted in favor of Sentry Select Insurance. The trial court found that uninsured motorists (UM) coverage had been validly rejected by the owner of the vehicle driven by Herman Duke at the time of the accident. In Duke v. Evans, No. 47,383–CA, 2012 La. App. LEXIS 1040 (La. App. 2d Cir. Aug. 8, 2012), the Louisiana Court of Appeal resolved the dispute.

Claims Practices
August 2012

On February 24, 2008, Herman Duke was driving a vehicle on Airline Drive in Bossier City, Louisiana, and was injured as the result of a collision with a vehicle driven by Morgan Evans. The vehicle driven by Duke was owned by his employer, Orr Motors of Louisiana, Inc., which was a named insured in an automobile liability policy issued by Sentry.

Subsequently, the Dukes filed a petition for damages against the defendants, Morgan Evans and United Services Automobile Association (USAA), her liability insurer. The Dukes sued Sentry alleging UM/underinsured motorists (UIM) coverage through the Sentry policy. Sentry filed an answer denying UM/UIM coverage. A UM/UIM rejection form had been signed on January 31, 2005, by William Gregg Orr, who was the owner and authorized representative of Orr Motors and the other auto dealerships listed as named insureds in the Sentry policy. The form contained the handwritten names of two named insureds, "Class Motors of Texarkana, Inc." and "Gregg Orr Auto Collection," above Orr's signature.

In a settlement agreement, the Dukes collected the full $10,000 liability limits provided by the USAA insurance policy and dismissed their claims against Evans and USAA. The Dukes and Sentry filed motions for summary judgment based on the Sentry insurance policy. After a hearing, the district court found that UM/UIM coverage had been validly waived because Gregg Orr possessed the authority and the intent to reject UM/UIM coverage for all of the dealerships listed as named insureds in the policy and had signed the rejection form. The court rendered judgment granting Sentry's motion for summary judgment, denying the plaintiffs' motion and dismissing their claims.


The plaintiffs contended that the district court erred in granting Sentry's motion for summary judgment. In four assignments of error, the plaintiffs argued that the UM/UIM rejection was invalid because Orr Motors, a named insured, was not specifically listed on the waiver form.

Louisiana statutes govern the issuance of UM/UIM coverage and provide that no automobile liability insurance policy shall be issued in this state unless coverage is provided therein for the protection of persons insured under the policy who are legally entitled to recover damages from owners or operators of uninsured or underinsured motor vehicles because of bodily injury. However, the coverage required under this section is not applicable when any insured named in the policy either rejects coverage, selects lower limits, or selects economic-only coverage, in the manner provided in the statute. Such rejection of UM/UIM coverage must be made only on a form prescribed by the commissioner of insurance. The prescribed form is provided by the insurer and signed by the named insured or his or her legal representative. A properly completed and signed form creates a rebuttable presumption that the insured knowingly rejected coverage.

Completion of the prescribed form involves six tasks:

  1. initialing the selection or rejection of coverage;
  2. if limits lower than the policy limits are chosen, then selecting the amount of coverage;
  3. printing the name of the named insured or legal representative;
  4. signing the name of the named insured or legal representative;
  5. filling in the policy number; and
  6. filling in the date.

The statutory requirement of UM/UIM coverage is read into any automobile liability policy unless validly rejected. Any exclusion from coverage in an insurance policy must be clear and unmistakable.


In this case, the parties did not dispute that Sentry provided the prescribed UM/UIM form or that the form was initialed to reject UM/UIM coverage, included the policy number, and was dated. Nor did the plaintiffs dispute that Gregg Orr was the person authorized to obtain liability insurance and to reject UM/UIM coverage for the dealerships he owned, including Orr Motors, which was listed as a named insured in the Sentry policy. This court had previously held that any named insured in the policy may reject UM/UIM coverage for all other insureds.

Gregg Orr signed the form below the following statement: "The choice I made by my initials on this form will apply to all persons insured under my policy." Thus, the express language of the prescribed form demonstrated that the rejection of UM/UIM coverage was binding on all named insureds, including Orr Motors.

The court held that the district court's finding that UM/UIM coverage was validly rejected was correct and, consequently, the district court did not err in granting Sentry's motion for summary judgment.


Insurance, contrary to the desire of some, is a contract just like any other. It makes certain promises to the person insured. After an accident with an uninsured motorist or underinsured motorist, the person injured really wants to receive benefits for all injuries incurred. The coverage is designed to replace the coverage the tortfeasor—the person who caused the accident—did not buy himself or herself.

States like Louisiana require insurers to offer the coverage and automatically provide it unless specifically rejected. That is what happened in this case. Although we can empathize with the Dukes, the person who bought the insurance specifically rejected UM/UIM coverage. No promise made by Sentry and the Dukes—no matter how badly injured—could create coverage where no coverage ever existed.

Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.

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