Auto insurance companies are notorious for exploiting every possible opportunity to limit liability and deny coverage to insureds who file a claim. Although courts have been clear that ambiguity in the policy will result in a favorable ruling toward the insured, companies can be successful when the language is forthright.
Still, there have been many situations in which insureds believed they were covered when in fact they weren’t.
It’s important to make sure every household driver and vehicle is covered so that there can be no question if and when it becomes necessary to collect on that coverage.
In the recent case of Skaperdas v. Country Cas. Ins. Co., before the Illinois Supreme Court, questions arose about auto insurance coverage as it related to the policy holder’s fiancee and then later, the fiancee’s son. The allegation was the agent working for the insurance company failed in his duty of care to secure the kind of insurance coverage plaintiff had requested. Because plaintiff alleged the insurance company’s employee was to blame for the oversight, he asserted the insurance company should be required to pay under the doctrine of respondeat superior (which holds employers responsible to cover damages for the actions of employees).
According to court records, police holder/plaintiff secured an auto insurance policy through defendant in 2006. Sometime thereafter, his fiancee was involved in a crash while driving one of his vehicles. The insurance company agreed to cover the claim, but required plaintiff to change his policy so that his fiancee would be named an additional driver.
Plaintiff met with the insurance agent to request coverage for his fiancee. Agent prepared the policy, but identified only plaintiff as the named insured. The fiancee was not included as a named insured, though the declarations page did identify a driver “female 30-64.”
After that new policy was issued, the fiancee’s minor son was struck by a vehicle while riding his bicycle and suffered serious injury. The at-fault driver’s policy had a maximum limit of $25,000 – which was not nearly enough to cover the boy’s extensive injuries.
Plaintiffs requested underinsured motorist coverage from their own insurance company. However, that claim was denied on grounds neither the fiancee or her son was listed as a named insured on the policy.
Plaintiff and fiancee, on behalf of herself and son, filed a complaint alleging the insurance agent was negligent in failing to secure the requested insurance coverage, and further the insurance company was responsible for those acts of omission. The agent sought to dismiss the claim on grounds he did not owe a duty of care in procuring requested insurance coverage. The insurer, too, filed a motion to dismiss asserting it was not liable for its agent’s actions because he didn’t owe plaintiffs a duty of care.
Circuit court granted defense motions to dismiss.
However, the appeals court reversed and the state supreme court affirmed. In its reversal, the appeals court noted a statute in state law that specifically says a person must be licensed in order to sell, solicit or negotiate insurance and has a duty to exercise ordinary care in procuring insurance.
When that ruling was appealed to the state supreme court, the state insurance association was allowed to file an amicus curia brief, offering its stance on the matter.
Defendants argued the court should not place a duty of ordinary care on insurance agents because they are contractually bound to sell their own company’s insurance, and the imposition of such a duty would mean, potentially, they could be liable for failing to place coverage with a different company if it was better for the buyer. However, the state supreme court rejected this argument, noting a duty of care wouldn’t require an agent to obtain the “best possible coverage” for a customer, but simply to exercise ordinary care and skill in procuring coverage requested by the insured. If the company doesn’t offer what the customer wants, the agent can simply inform the customer they will need to look elsewhere.
Essentially, the court ruled agents have an ordinary duty of care when a specific request for coverage is made – but not after a vague request for insurance coverage.
If your insurance company is giving you a difficult time in your efforts to collect damages after a crash, contact an experienced car accident lawyer today.
If you have been a victim of a traffic accident, call Chalik & Chalik at (954) 476-1000 or 1 (800) 873-9040.
Skaperdas v. Country Cas. Ins. Co., March 19, 2015, Illinois Supreme Court
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