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Exhaustion Clause Enforced In Pennsylvania Underinsured Motorist Case

Last week, in the Eastern District of Pennsylvania Judge McLaughlin in Irving v. Progressive Speciality Ins. Co., NO. 11-7594, 2012 WL 2912309 (E.D. Pa. July 17, 2012) (mem.) reviewed the enforceability of an exhaustion clause in a motor vehicle insurance policy in a case where a lawsuit was settled for the policy limits of one case but another case was still pending against another driver who was alleged to have been negligent for a “waive on”.

Irving settled the first case against a tortfeasor for $15,000 and then sought underinsured motorist (UIM) coverage from his insurer Progressive. Progressive did not object to the UIM claim but argued that it was entitled to a credit of not only the $15,000 but the full $300,000 policy limit on a second tortfeasor that is still pending where Irving sued for negligence in waiving on the other driver.

Judge McLaughlin holds that pursuant to exhaustion clause the UIM insurer is entitled to a credit for the liability limits that were paid on behalf of the striking defendant in lawsuit number one as well as a credit for the available liability limits covering the “waive on” defendant in the ongoing lawsuit number two.

If you would like a copy of the Court’s Order and Memorandum or have an injury or a loved one is injured or killed in a Pennsylvania car accident or crash, feel free to contact Central Pennsylvania based Schmidt Kramer Injury Lawyers who specialize in truck accidents and can answer any questions you may have about your rights after being injured in a tractor trailer accident.