When does modifying an insurance policy create a 'new policy' under Utah's underinsured motorist statute? Kingston v. State Farm Explained

Utah’s underinsured motorist (UIM) statute requires insurers to provide maximum UIM coverage unless the insured properly waives it. But what happens when an insurer modifies an existing policy—does that create a “new policy” triggering fresh disclosure requirements?

Background and Facts

In Kingston v. State Farm, the insureds originally purchased automobile insurance for their Subaru with UIM coverage limits of $100,000/$300,000, properly waiving the higher limits available. Two years later, they substituted a Chevrolet for the Subaru on the same policy through an automatic renewal process. State Farm did not obtain a fresh selection/rejection form for the new vehicle. When Ms. Kingston was injured by an underinsured driver while driving the Chevrolet, the Kingstons claimed they were entitled to the maximum UIM coverage of $250,000/$500,000 because State Farm failed to comply with statutory requirements for “new policies.”

Key Legal Issues

The central question was whether substituting one vehicle for another on an existing insurance policy constitutes a “new policy” under Utah Code § 31A-22-305.3. The court also addressed whether subsequently enacted statutory definitions could apply retroactively to claims that arose before the amendments.

Court’s Analysis and Holding

The Court of Appeals applied the three-factor test from Iverson v. State Farm to determine whether a policy change creates a “new policy”: (1) whether the change was requested by the insured or was routine; (2) whether the average insured would want to reevaluate their risk; and (3) whether the change’s character would lead the average insured to believe they were receiving a new policy. The court found the vehicle substitution did not meaningfully alter the risk relationship between the parties, as the insureds, premiums, and coverages remained identical.

Practice Implications

This decision clarifies that routine vehicle substitutions typically will not trigger UIM statute requirements for new disclosure forms. Practitioners should focus on whether policy modifications create material changes that would cause the average insured to reevaluate their coverage decisions. The court’s emphasis on the “totality of circumstances” suggests that each case will be highly fact-specific, requiring careful analysis of all relevant factors rather than relying on any single element.