ILNews

COA adopts common-sense rule on providing insurance policies

Back to TopCommentsE-mailPrintBookmark and Share

The Indiana Court of Appeals has adopted a common-sense rule many other courts throughout the country have implemented, in requiring insurers to provide copies of their insurance policies to the insured if they ask for one following a loss.

If that doesn’t happen, the state’s intermediate appellate court holds that the insurer would then be banned from arguing in subsequent litigation that a policy holder didn’t comply with all the terms and couldn’t receive coverage.

The ruling comes today in Auto-Owners Insurance Company v. Gary Hughes, 18A02-1006-PL-659, a case out of Delaware Circuit Court where Judge John Feick had denied a summary judgment from Auto-Owners Insurance that a home fire insurance coverage suit was barred by a one-year statute of limitations.

An arson fire in March 2002 destroyed Gary Hughes’ home in Eaton, and part of his insurance policy with Auto-Owners said that the company couldn’t be sued unless there’s full compliance with all of the policy terms and that the suit must be filed within a year of the loss or damage. Hughes hired a public adjuster as his agent and 11 months later, Auto-Owners denied the claim due to “arson, fraud, misrepresentation, false swearing, and lack of determination of ownership or an insurable interest.” Hughes filed a breach of contract and breach of duty suit in May 2003, 14 months following the loss.

The insurance company argued that Hughes’ suit should be barred because it wasn’t filed within a year, but the trial court twice denied summary judgment motions. The court ruled in favor of Auto-Owners on the punitive damage claim but denied the bad faith claim and one-year limitation defense, and a jury awarded Hughes $166,792.83 in damages.

One of the issues on appeal became whether Hughes had received a copy of his insurance policy following the loss, as he claimed to have requested. He argued that Auto-Owners shouldn’t be able to raise that claim, as it didn’t provide him with a copy, while the insurance company contended it had supplied him with one.

Specifically, the appellate panel found that the principles of equity and fairness create a limited duty to provide a copy of an insurance policy when the insured has requested one, and that failure to discharge that duty would prevent an insurer from asserting noncompliance with policy terms. Citing caselaw from Georgia, Illinois, Missouri, New Jersey, New York, Rhode Island, and Wisconsin, the Hoosier appellate panel adopted that rule as its own.

“We think that this rule reflects the realities of the typical relationship between an insurance company and an insured, at least when the insured is a private individual,” Judge Cale Bradford wrote. “Very few insureds will ever read, much less attempt to understand, their insurance policies, unless of course they happen to suffer a loss. We also venture to guess that very few homeowners will ever take the precaution of storing a copy of their policy at a secure location outside of the home, making it that much more likely that a copy will be destroyed in a loss and not be available when needed most.”

But even with that holding, Hughes lost because the case record proved that Auto-Owners had supplied him with a copy of his policy within a month of his loss in March 2002. Therefore, Auto-Owners should have been able to raise the one-year limitation argument and should have prevailed on that point, the appellate court ruled.

The case was reversed and remanded to the trial court with instructions to enter summary judgment in favor of Auto-Owners.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Hail to our Constitutional Law Expert in the Executive Office! “What you’re not paying attention to is the fact that I just took an action to change the law,” Obama said.

  2. What is this, the Ind Supreme Court thinking that there is a separation of powers and limited enumerated powers as delegated by a dusty old document? Such eighteen century thinking, so rare and unwanted by the elites in this modern age. Dictate to us, dictate over us, the massess are chanting! George Soros agrees. Time to change with times Ind Supreme Court, says all President Snows. Rule by executive decree is the new black.

  3. I made the same argument before a commission of the Indiana Supreme Court and then to the fedeal district and federal appellate courts. Fell flat. So very glad to read that some judges still beleive that evidentiary foundations matter.

  4. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

  5. During a visit where an informant with police wears audio and video, does the video necessary have to show hand to hand transaction of money and narcotics?

ADVERTISEMENT