The Maryland Court of Appeals is still working during the coronavirus shutdown. The court put out a new opinion Monday in Nationwide v. Shilling that addressed the question of when the 3-year statute of limitations begins to run on a claim for underinsured motorist benefits.
The gist of the court’s holding is good for plaintiffs. The court found that a claim for underinsured motorist benefits is basically a breach of contract action. So the statute of limitations begins to run when the insurance carrier breaches the contract by denying the insured’s UIM claim. Our lawyers have always interpreted the law this way. But we always pretended that the statute of limitations was not extended because even having to fight this issue and win is not worth the trouble of not fighting the issue at all.
But this case has dicta that has two big problems that are very troubling with respect to the insurance company’s ability to modify the statute of limitations in uninsured motorist cases by putting a different statute of limitations in their contracts. This would be a disaster and lead to a ton of litigation over any issue that is well understood by everyone.