Uninsured motorist (UM) coverage provides compensation to accident victims when they are injured by a driver who lacks sufficient insurance.

Oklahoma City, OK -- (ReleaseWire) -- 03/25/2020 --UM policies typically reserve the insurer's "subrogation" rights. This means the UM carrier can seek to recover any benefits paid from the negligent driver or their insurer.

If the person covered by the UM policy interferes with these subrogation rights, the carrier may deny coverage.

This happened in a recent Oklahoma case, Brooks v. Philadelphia Indemnity Insurance Company. Vickie Brooks was injured in a March 2015 auto accident. She was driving a vehicle owned by her employer. The employer previously purchased $1 million in UM coverage for its vehicles from Philadelphia Indemnity.

Brooks also had personal auto insurance, as did the other driver involved.

Brooks filed claims with both of these insurers following the accident. She later signed releases with both companies, discharging their liability in exchange for the respective policy limits.

Brooks then filed a claim for UM benefits with Philadelphia Indemnity.

Later, Brooks brought a lawsuit in Oklahoma City federal court. She alleged Philadelphia Indemnity was violating Oklahoma law by failing to pay her the $1 million in UM benefits under her employer's policy.

In a February 28, 2020, opinion, U.S. District Judge Charles B. Goodwin rejected Brooks' lawsuit. He awarded summary judgment to Philadelphia Indemnity. The judge found that Brooks improperly "destroyed" Philadelphia Indemnity's subrogation rights by failing to inform it before settling with the other two insurance companies. She therefore could not collect under the UM policy.

Goodwin noted that Philadelphia Indemnity was listed as the insurer of record on the official police accident report.

This effectively put Brooks on-notice about the UM carrier's subrogation rights. The judge said "no reasonable jury" could therefore find that Brooks did not "knowingly" interfere with Philadelphia Indemnity's subrogation rights.

Oklahoma City personal injury and insurance attorney George H. Brown explained why subrogation rights were such a big deal in Oklahoma.

"A UM carrier is basically paying a debt owed by a third party, that is the negligent driver who caused an accident. The UM carrier therefore must have the ability to try and recoup its losses from the driver or other insurance companies. The accident victim must respect these rights. This means, among other things, the victim needs to inform the UM carrier before signing any agreement that releases another party from any liability for the accident."