ILNews

Innocent co-insureds looking for protection

Back to TopCommentsE-mailPrintBookmark and Share

Advocates in Indiana fighting for “innocent co-insured” protections say they will continue to ask the Legislature to create a new law.

Kerry Hyatt Blomquist, legal director for the Indiana Coalition Against Domestic Violence, said the problem of innocent co-insureds being denied coverage happens every day. However, the denials are seldom challenged because oftentimes the victims are “so used to being held down that sometimes they are not very good at sticking up for themselves.”

The term “innocent co-insured” refers to individuals who had nothing to do with an intentional act that caused a loss. Yet they are refused payment because they hold the insurance policy jointly with the person who is responsible for the damage.

crider-michael.jpg Crider

A complaint filed in May 2013 was thought to be a lawsuit that would set precedent in favor of the innocent co-insured. That case was settled, and another dispute involving an innocent co-insured indicated the courts were likely to find for the insurance companies.

Consequently, those championing the innocent co-insured issue have decided to try a legislative approach. One attempt has already failed in the Indiana General Assembly, but they say they’ll be back.

A bill introduced by Sen. Michael Crider during the 2013 session would have added a new section to state law prohibiting denial of coverage to an innocent co-insured. The measure did not get a hearing in committee. But Crider, R-Greenfield, is optimistic the Legislature will eventually act.

Advocates thought Womack v. Allstate Property & Casualty Insurance Company, et al., 3:13-CV-00495, might be the case that would set precedent.

The plaintiff, Gwendolen Womack of LaPorte County, lost her home to a fire set by her estranged husband. Her insurance provider refused to cover the damages because, the insurance company said, the fire was an intentional act by one of the insured parties and the policy expressly did not cover intentional acts.

To the Indiana Coalition Against Domestic Violence, Womack was an innocent co-insured. Blomquist was able to enlist Angela Krahulik, partner at Ice Miller LLP, to take the case pro bono.

Krahulik and her colleagues, Elizabeth Timme and Sarah Murray, filed the complaint in U.S. District Court for the Northern District of Indiana. The case was settled in January 2014 with the terms remaining confidential.

Allstate declined to comment about the Womack settlement or on its policy, in general, regarding innocent co-insureds.

Krahulik said she and her client feel very fortunate to have settled because another innocent co-insured lost his lawsuit in court. In Deeter v. Indiana Farmers Mutual Insurance Company, 43A04-1305-PL-229, the Indiana Court of Appeals in December affirmed summary judgment for the insurance company based on a plain reading of the insurance contract.

A petition to transfer the Deeter case is pending before the Indiana Supreme Court.

The decision, Krahulik said, indicates the innocent co-insured issue will likely have little traction in the courts. Blomquist says the Deeter case has key differences from Womack’s situation but the coalition is still turning to a legislative approach.

“We actually did think we could find the remedy from the courts,” Blomquist said.

Crider was not working with the coalition when he introduced his innocent co-insured legislation, Senate Bill 170. The former police officer authored the measure after a friend destroyed his ex-wife’s home as part of his suicide and the insurance company refused coverage, which left the ex-wife and children struggling.

“I’m big on fairness,” Crider said. “This just does not feel right to me.”

Provisions in Crider’s bill would have prohibited property and casualty insurers from denying or limiting payment on a claim from an innocent co-insured. Also, insurers could not refuse to issue or renew a policy with an innocent co-insured.

In addition, the bill allowed for stiff penalties – a fine between $25,000 and $50,000 for each act and a revocation of license – for insurance providers who were found to have engaged in unfair and deceptive acts.

When he introduced the bill, Crider said he encountered many people who were interested in the issue which leads him to believe, like Blomquist, that denials to innocent co-insureds are more common than many realize.

The Legislature, Crider said, will have to be educated on the issue, so getting a bill passed may take several tries.

“The cause needs to be addressed,” he said. “If there is somebody else who is a better champion of this issue, I am willing to step aside to get it done.”•

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
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. I enrolled America's 1st tax-free Health Savings Account (HSA) so you can trust me. I bet 1/3 of my clients were lawyers because they love tax-free deposits, growth and withdrawals or total tax freedom. Most of the time (always) these clients are uninformed about insurance law. Employer-based health insurance is simple if you read the policy. It says, Employers (lawyers) and employees who are working 30-hours-per-week are ELIGIBLE for insurance. Then I show the lawyer the TERMINATION clause which states: When you are no longer ELIGIBLE! Then I ask a closing question (sales term) to the lawyer which is, "If you have a stroke or cancer and become too sick to work can you keep your health insurance?" If the lawyer had dependent children they needed a "Dependent Conversion Privilege" in case their child got sick or hurt which the lawyers never had. Lawyers are pretty easy sales. Save premium, eliminate taxes and build wealth!

  2. Ok, so cheap laughs made about the Christian Right. hardiharhar ... All kidding aside, it is Mohammad's followers who you should be seeking divine protection from. Allahu Akbar But progressives are in denial about that, even as Europe crumbles.

  3. Father's rights? What about a mothers rights? A child's rights? Taking a child from the custody of the mother for political reasons! A miscarriage of justice! What about the welfare of the child? Has anyone considered parent alienation, the father can't erase the mother from the child's life. This child loves the mother and the home in Wisconsin, friends, school and family. It is apparent the father hates his ex-wife more than he loves his child! I hope there will be a Guardian Ad Litem, who will spend time with and get to know the child, BEFORE being brainwashed by the father. This is not just a child! A little person with rights and real needs, a stable home and a parent that cares enough to let this child at least finish the school year, where she is happy and comfortable! Where is the justice?

  4. "The commission will review applications and interview qualified candidates in March and April." Riiiiiight. Would that be the same vaulted process that brought us this result done by "qualified candidates"? http://www.theindianalawyer.com/justices-deny-transfer-to-child-custody-case/PARAMS/article/42774 Perhaps a lottery system more like the draft would be better? And let us not limit it to Indiana attorneys so as to give the untainted a fighting chance?

  5. Steal a little, and they put you in jail. Steal a lot, and they make you king. Bob Dylan ala Samuel Johnson. I had a very similar experience trying to hold due process trampling bureaucrats responsible under the law. Consider this quote and commentary:"'When the president does it, that means it is not illegal,' [Richard] Nixon told his interviewer. Those words were largely seen by the American public -- which continued to hold the ex-president in low esteem -- as a symbol of his unbowed arrogance. Most citizens still wanted to believe that no American citizen, not even the president, is above the law." BWHaahaaahaaa!!!! http://www.philly.com/philly/blogs/attytood/When-the-president-does-it-that-means-it-is-not-illegal.html

ADVERTISEMENT