Statute of Limitations Against Your Underinsured Motorist Coverage

This issue covers those circumstances when you know the defendant insurance coverage will not be adequate to cover the extent of the injury you have sustained. This can happen when the defendant has no insurance or the insurance they have is not enough to compensate your damages. So the issue sometimes arises as to when do you have to file suit against your own insurance company or more accurately the insurance company covering the vehicle you were in at the time of the accident. Some people argue the time frame starts when you are injured. However in Maryland personal injury cases the suit against the UM carrier is a claim in breach of contract. As such according to Lane v. Nationwide Mut. Ins. Co., 321 Md. 165, 582 A.2d 501 (1990), the court determined the Statute of Limitations will not begin to run on a suit by the insured against the insurer for the breach of the contractual duty to indemnify until that breach literally occurs.

In the Lane case husband and wife were involved in an automobile accident that was the apparent fault of an uninsured motorist. They notified their insurance company of the accident shortly after it happened. On December 14, 1982, they brought suit against the uninsured motorist. The insurance company, however, made no effort to intervene. On April 17, 1986, over three years later, the Lanes sued their insurance company for uninsured motorist benefits. The insurance company filed a motion for summary judgment, asserting that the action was barred by the three-year Statute of Limitations. The Court of Appeals held the Statute of Limitations cannot begin running until there is an actual breach of the contract.