Filed: October 16, 1991
Ronald F. Stein, Esq.
Shaw & Stein
Point Pleasant, West Virginia
Attorney for Plaintiffs
R. Carter Elkins, Esq.
Laura L. Gray, Esq.
Campbell, Woods, Bagley, Emerson, McNeer and Herndon
Huntington, West Virginia
Attorneys for the Defendant
JUSTICE NEELY delivered the Opinion of the Court.
1. "When an insurer is required by statute to offer
optional coverage, it is included in the policy by operation of law
when the insurer fails to prove an effective offer and a knowing
and intelligent rejection by the insured." Syllabus Point 2, Bias
v. Nationwide Mut. Ins. Co., ___ W. Va. ___, 365 S.E.2d 789 (1987).
2. W. Va. Code 33-6-31(b) , mandates that when an
insurer fails to prove an effective offer and a knowing and
intelligent waiver by the insured, the insurer must provide the
minimum coverage required to be offered under the statute.
In this case the Circuit Court of Mason County has
certified the following question to us:
Is an insurance carrier obligated to provide underinsurance coverage in the limits of $100,000 per person and $300,000 per occurrence, on each of four automobile liability insurance policies held by the plaintiffs, when the liability limits on each of the four policies are $25,000 per person and $50,000 per occurrence after the jury has ruled, pursuant to Bias v. Nationwide Mutual Ins. Co., 365 S.E.2d 789 (W. Va. 1987), that the plaintiffs did not make a knowing and informed rejection of an offer of underinsurance coverage on the four policies at issue when the plaintiffs held a fifth policy which provided liability limits of $25,000/$50,000 and underinsurance coverage limits of $100,000/$300,000?
We answer the certified question in the negative.
This certified question reaches us by stipulation of the parties. Jason Riffle was injured in an automobile accident on 6 November 1988. Mr. Riffle's friend, John Kinniard, was driving the car which belonged to Mr. Riffle's mother. After the accident, Mr. Riffle received $20,000 from Mr. Kinniard's insurance carrier and $130,000 from State Farm Insurance Company. The RifflesSee footnote 1 sued State Farm seeking underinsured motorist coverage on each of four
other automobile liability policies issued by State Farm to the
Riffles.See footnote 2
The liability limits on each of the four policies are
$25,000 per person and $50,000 per occurrence. State Farm had
previously offered the Riffles underinsured motorist coverage in
excess of their own liability coverage on each of the policies for
$100,000 per person and $300,000 per accident, which the Riffles
did not accept. A jury decided that the Riffles' rejection of this
coverage was not knowing and informed; therefore, the trial court
held State Farm liable under this Court's decision in Bias v.
Nationwide Mut. Ins. Co., ___ W. Va. ___, 365 S.E.2d 789 (1987).
The trial court ordered State Farm to pay $100,000 per
person underinsured motorist coverage on each of the four policies.
Apparently, the court decided that because the Riffles had not
knowingly waived the $100,000 per person underinsured motorist
coverage, the statute required State Farm to provide that amount of
coverage. The parties then stipulated the certified question to
The issue in this case is the application of W. Va. Code,
33-6-31(b) See footnote 3 and this Court's interpretation of that statute
in Bias, supra, and Miller v. Hatton, ___W. Va.___, 403 S.E.2d 782
(1991). W. Va. Code, 33-6-31(b)  provides in pertinent part:
[The insurer] shall provide an option to the
insured with appropriately adjusted premiums to pay
the insured all sums which he shall legally be
entitled to recover as damages from the owner or
operator of an uninsured or underinsured motor
vehicle up to an amount not less than limits of
bodily injury liability insurance and property
damage liability insurance purchased by the insured
without setoff against the insured's policy or any
other policy. . . .
Neither statutory construction nor the dictate of wise
public policy supports the decision by the trial court. As we held
in Syllabus Point 2 of Bias, supra:
When an insurer is required by statute to offer optional coverage, it is included in the policy by operation of law when the insurer fails to prove an effective offer and a knowing and intelligent rejection by the insured.
The plain language of Bias provides that if an insurer fails to prove an effective offer and a knowing waiver of the
statutorily required coverage, then that coverage becomes part of
the policy by operation of law. "That coverage" is the amount of
coverage that the insurer is required to offer under the statute.
The statute requires the insurer to offer underinsured motorist
coverage "up to an amount not less than the limits of bodily injury
liability insurance and property damage liability insurance." In
the case of the four policies owned by the Riffles, these limits
were $25,000 and $50,000. Accordingly, the plain language of the
statute required State Farm to offer underinsured motorist coverage
of $25,000 per person and $50,000 per occurrence. When State Farm
could not prove a valid offer and a knowing rejection, the
statutory requirement became a part of each policy by operation of
The purpose of W. Va. Code 33-6-31  is to provide all insurance buyers with an opportunity to purchase a minimum amount of underinsured motorist coverage. When the buyer is not given this opportunity, the statute provides him with the minimum coverage. The statute and our decision in Bias encourage insurance companies to make a real effort to inform customers about the opportunity for underinsured motorist coverage. Our decision today strengthens that incentive. A ruling for the plaintiffs, on the other hand, would create an incentive for insurance companies to offer only the minimum required coverage. Insurance companies
would offer only the minimum coverage so that in situations in
which the coverage was waived, but where a jury later found the
waiver to be unknowing, the company would have to provide only the
minimum coverage as damages.
Clearly, the legislature did not intend to create a
ceiling on the amount of coverage that insurance companies can
offer; rather, it intended to create a floor below which the
offered coverage could not go. A ruling in plaintiffs' favor in
this case would in fact create such a ceiling. Therefore, we find
W. Va. Code 33-6-31(b)  mandates that when an insurer fails
to prove an effective offer and a knowing and intelligent waiver by
the insured, the insurer must provide only the minimum coverage
required to be offered under the statute.
For the foregoing reasons, the certified question is
answered in the negative.
Certified Question Answered.
Footnote: 1The plaintiffs below were Mr. Riffle and both of his parents, Everett and Dottie Riffle.
Footnote: 2We have previously permitted the stacking of underinsured motorist coverage. See, State Automobile Ins. Co. v. Youler, ___ W. Va. ___, 396 S.E.2d 737 (1990).
Footnote: 3Although W. Va. Code 33-6-31 was amended in 1988, the amendment does not effect the issues at stake in this case or the applicability of Bias.