Facts

Bill and Kimberly Matthes sued the Interinsurance Exchange of the Automobile Club, alleging that Kimberly Matthes was negligently advised by the Exchange's sales agent when she purchased a policy of automobile liability insurance for them. Kimberly Matthes took the Declarations page of her then-current policy with another insurance company and gave it to the sales agent, requesting the same coverage. Kimberly Matthes purchased bodily injury coverage limits of 250/500 and UM/UIM limits of 30/60, the same as in the then-current policy. Subsequently, and while that policy was in force and effect, Bill Matthes was severely injured by an uninsured motorist.

Matthes' $30,000 Uninsured Motorist policy limits were insufficient to compensate him for his injuries. The Exchange paid Matthes the $30,000 UM limits. Matthes then sued the Exchange, claiming that the sales agent should have counseled them further regarding the scope of UM coverage, should have persuaded them to purchase higher UM/UIM limits, and that they should be compensated for being advised improperly. The Exchange honored the contract in the amount of the policy limits purchased, but denied any legal duty to do more than that.

PLAINTIFF'S CONTENTIONS:
Plaintiff contended that the Exchange was negligent in advising Kimberly Matthes regarding uninsured motorist coverage and the need for it. Plaintiff contended that the Exchange should have recommended that plaintiff's UM coverage should have been equal to the amount of bodily injury coverage limits purchased.

DEFENDANT'S CONTENTIONS:
The Exchange denied wrongdoing and contended that there is no legal duty in California to persuade an insured to purchase more coverage than they specifically request. The Exchange contended further that there is no duty to invade an insured's right to privacy by asking for disclosure of confidential financial information, and no duty to perform the function of a "financial advisor" in determining what coverage levels should be purchased.

Settlement Discussions

Matthes made an offer for compromise and judgment in the amount of $219,000.

Injuries

Matthes' injuries included multiple fractures which required a significant period of hospitalization and rehabilitation.

Result

The Exchange accepted the plaintiffs' offer to compromise and have judgment entered against The Exchange for $219,000.