The Procedures When Injured Person Agrees to Settle a Claim With Underinsured Motorist's Liability Insurer

Section 627.727(6)(a), Florida Statutes (1995), sets forth the procedures that must be followed when an injured person agrees to settle the claim with the underinsured motorist's liability insurer for an amount that does not "fully satisfy the claim," thereby "creating an "underinsured motorist claim." If these procedures are followed, the injured party is authorized to execute a release in favor of the "underinsured motorist's liability insurer" and still pursue any "underinsured motorist claim." Id. In addition, section 627.727(6)(b) discusses procedures for the "underinsured motorist insurer" to follow if it chooses to refuse permission to settle in order to preserve its subrogation rights against "the underinsured motorist and the liability insurer." The court have previously recognized that this section sets forth "a procedure to be followed when a claimant settles with the tort-feasor's liability carrier." Woodall v. Travelers Indem. Co., 699 So. 2d 1361, 1363 (Fla. 1997). The fact that this procedure only anticipates offers of settlement from a "liability insurer" rather than a self-insured tort-feasor strongly suggests that the Legislature did not contemplate that a self-insured motorist could be considered "underinsured." Thus, under sections 627.727(3) and (6), in order to be considered underinsured, the tort-feasor must have a liability insurer. The term "liability insurer" is undefined in the part of the Insurance Code related to uninsured motorists coverage. See generally 627.727. However, an "insurer" is broadly defined in section 624.03, Florida Statutes (1995), as "every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance or of annuity."