Delaware Supreme Court Sets Jurisdiction for UIM Claims

The Supreme Court of Delaware has recently delivered a pivotal decision impacting the automobile insurance industry. On December 18, 2025, the Court confirmed the Superior Court's dismissal of James E. Berry's underinsured motorist (UIM) coverage claim against State Farm due to a lack of personal jurisdiction in Delaware. This ruling establishes significant precedent affecting the regulatory compliance requirements for insurance carriers.

James Berry, a Maryland resident with an insurance policy from State Farm that included nationwide UIM coverage, sought benefits after a Delaware car accident. After settling with the at-fault driver's insurer, he pursued first-party UIM benefits through the Delaware Superior Court. However, State Farm challenged the jurisdiction, leading Delaware courts to rule in favor of the insurer.

Jurisdictional Boundaries in Insurance Disputes

The primary legal issue revolved around Delaware's long-arm statute, designed for regulatory compliance through asserting jurisdiction over nonresident entities within the state. The Delaware Supreme Court concluded that the statute does not cover out-of-state insurance providers in Berry's case, where the policy and contractual obligations originated from another state, despite the accident occurring in Delaware.

This decision solidifies previous rulings denying jurisdiction for comparable UIM cases and highlights jurisdictional limitations in auto insurance disputes. It distinguishes between liability insurers involved in third-party claims and UIM insurers managing first-party claims, restricting jurisdictional theories to traditional product liability scenarios.

Implications for Insurance Providers and Policyholders

Berry argued that the nationwide coverage implied Delaware-specific engagement, invoking Delaware law's "dual jurisdiction" concept. The Court dismissed this argument, emphasizing insurance policies do not equate to tangible market engagement, thus not meeting dual jurisdiction criteria.

Overall, Delaware’s Supreme Court has set a clear jurisdictional framework for UIM claims. This ruling aligns with trends towards definitive jurisdictional statute applications, reducing litigation uncertainty. It provides clarity for insurance carriers and policyholders on the legal boundaries of contractual disputes stemming from cross-border auto accidents. Insurance professionals should recognize the importance of strategic jurisdictional analysis in cross-border claims, ensuring compliance with industry regulations.