Negligent Infliction of Emotional Distress Claims and Uninsured Motorists/Under Insured Motorists Coverage

Most jurisdictions recognize a cause of action for negligent infliction of emotional distress (NIED). Under this type of cause of action there can be a monetary award of emotional distress damages without a direct physical injury to the victim. Is an NIED claim covered by Uninsured Motorists/Under Insured Motorists (UM/UIM) policies?

NIED claims are relatively rare given the unique factual predicate that typically gives rise to the cause of action. Most claim adjusters do not have experience in answering the question of whether NIED claims are covered by UM/UIM policies.

Mental or Emotional Distress

The majority of courts that have addressed this question have concluded that “bodily injury” under the police does not include mental or emotional distress absent a physical injury to the insured. (See, e.g., National Fire Ins. Co. of Hartford v. NWM-Oklahoma LLC, Inc., 546 F.Supp.2nd 1238, 1246 (W.D. Okla. 2008); Home Ins. Co. v. Hartford Fire Ins. Co., 379 F.Supp.2d 1282, 1289 (M.D. Ala. 2005); Garrison v. Bickford, 377 S.W.3d 659, 666-67 (Tenn. 2012); Daley v. Allstate Ins. Co., 135 Wash.2d 777, 958 P.2d 990 (1998))

An example of this viewpoint can be seen in Citizens Ins. Co. of America v. Leiendecker, 962 S.W.2d 446, 454 (Mo. Ct. App. 1998) where the court observed that “[i]n dictionary definitions, ‘bodily’ is equated with ‘physical’ … as contrasted with ‘mental.'” Thus, “‘bodily injury’ … refers to physical conditions of the body and excludes mental suffering or emotional distress.”

Another example can be seen in Johnson v. American Family Ins., 160 Ohio App.3d 392, 827 N.E.2d 403, 404 (2005), where the insured pursued an NIED claim in the UIM context stemming from the death of her sister in a car accident. The Johnson court concluded that the “policy clearly states, to be covered … [the insured] must have sustained ‘bodily injury’ caused by an accident … [a]lthough she certainly sustained emotional injury, [the insured] was not involved in and did not receive bodily injuries from the accident that caused the death of her sister.” Consequently, the Johnson court found that the insured’s UIM “claims were effectively excluded from coverage by the policy language.”

A minority of courts have found coverage for NIED claims. See, e.g., Evans v. Farmers Ins. Exchange, 34 P.3d 284, 286-87 (Wyo. 2001) and Ryder v. USAA General Indemnity Co., 938 A.2d 4, 5, 9 (Me. 2007). These courts have found an ambiguity in the policy language involving the term “bodily injury.”

In those cases where courts have found that NIED claims are covered under the UM/UIM policy, the courts must resolve the issue of whether the claims are subject to the single per person limit of the coverage. Courts are split on whether NIED claims, which are derivative claims, are subject to the single per person limit of UM/UIM coverage. Compare, Galgano v. Metropolitan Property & Cas. Ins. Co., 267 Conn. 512, 838 A.2d 993 (2004) and Farm Bureau Ins. Co. of Nebraska v. Martinsen, 265 Neb. 770, 659 N.W.2d 823(2003) (which found that NIED claims are subject to the single per person limit), with, Crabtree v. State Farm Ins. Co., 632 So.2d 736 (La. 1994) and Treichel v. State Farm Mut. Ins. Co., 280 Mont. 443, 930 P.2d 661 (1997) (finding that NIED claims were not subject to the single per person limit).

Courts Split on Issue

A review of the cases that have addressed the issue does not bring clarity to the analysis. The courts are split on the issues, and therefore claim adjusters should pursue a legal analysis of the NIED question under the state law governing the interpretation of the insurance policy.

Where a particular state has held that NIED claims are covered under the terms of standard UM/UIM policies and have also held that the NIED claims fall under the same bodily injury applicable to the physically injured insured, allocation questions may arise that should be resolved early in the claim process. This is required even in situations where a single attorney represents claimants who are husband and wife. In that situation, the spouse who was not physically injured has two claims covered by the UM/UIM single per person limit: loss of consortium (derivatively) and NIED (independently).

This issue should be addressed with the attorney representing the insureds early in the claim investigation so that the attorney is aware of the issue of allocation and can address it specifically with his clients.

In jurisdictions that have permitted coverage for NIED claims and have found that a separate per person policy limit is available for the NIED claim, the adjustment of the loss becomes relatively straight forward.

The insured’s physical injury UM/UIM claim is adjusted as it always would be with the corresponding adjustment of the derivative loss of consortium loss as part of that claim. The NIED claim is then analyzed independently as a separate claim with a separate per person limit.

However, an independent analysis may become difficult given the fact that both the loss of consortium and NIED claims are emotional-based claims that appear to overlap. If they are treated separately, a specific allocation of value must be made between loss of consortium type injury versus NIED injury. The adjustment process must be specific and focused on discovering the boundary line.