Failure to Advise Insurer of New Car Fatal to Claim
Read the full article at https://www.linkedin.com/pulse/undisclosed-intent-cannot-create-coverage-barry-zalma-esq-cfe and at https://zalma.com/blog plus more than 4250 posts.
Zarah-Marie Neme and Samuel Magura appealed the summary judgment dismissal of their claims against Progressive Direct Insurance Company.
In Zarah-Marie Neme and Samuel M. Magura, a married couple v. Progressive Direct Insurance Company, No. 38252-4-III, Court of Appeals of Washington, Division 3 (July 14, 2022) the Court of Appeals resolved the dispute over coverage for operation of a new vehicle.
FACTS
In 2019, Samuel Magura obtained an automobile insurance policy from Progressive. The policy period ran from May 23, 2019, to November 23, 2019. The policy’s declarations page listed Mr. Magura as the named insured and a 2016 Subaru Legacy as the covered auto. Prior to September 19, 2019, Mr. Magura’s wife, Zarah-Marie Neme, was listed as a driver on the policy but, as she had been living outside the country, she was not a named insured.
The policy provided that Progressive would pay damages for any bodily injury or property damage for which an insured person was found to be legally responsible. The policy also provided that Progressive would settle or defend any claim for damages. However, the policy excluded from coverage “bodily injury or property damage arising out of the ownership, maintenance or use of any vehicle owned by [the insured] . . . other than a covered auto.” The policy defined a “covered auto” to include an auto shown on the policy declarations page and “any additional auto.” An “additional auto” was defined as an auto you become the owner of during the policy period that does not permanently replace an auto shown on the declarations page if:
we insure all other autos you own;
the additional auto is not covered by any other insurance policy;
you notify us within 30 days of becoming the owner of the additional auto; and
you pay any additional premium due.
At no point during the conversation did Mr. Magura provide any specific information about a new vehicle he had purchased, or intended to purchase. After the phone call, the updated declarations page on Progressive’s website showed an increased premium of $93.53 with the 2016 Legacy as the only covered auto.
On September 20, the Appellants purchased a 2019 Subaru Impreza. On October 22, Ms. Neme was involved in a motor vehicle accident while driving the 2019 Impreza. Following the accident,
Mr. Magura called Progressive to file a claim. The customer service agent who received the call informed Mr. Magura the 2019 Impreza was not listed on the policy as a covered auto. Progressive later sent the Appellants a letter denying coverage for the claim, as the 2019 Impreza was not covered under the policy.
The Appellants later described the 2019 Impreza as a total loss, although they were required to continue to make payments on the vehicle. The following year, the Appellants were sued by the other party to the accident for damages arising out of the collision. Based on the previous denial of coverage, Progressive did not defend the Appellants in this suit.
The Appellants then sued Progressive.
ANALYSIS
The Appellants’ claims against Progressive all turn on whether the 2019 Subaru Impreza was a covered vehicle under Progressive’s policy, either by virtue of the terms of the policy or through Progressive’s specific assurances.
There is no evidence the 2019 Impreza was a covered auto under the terms of Progressive’s policy. The 2019 Impreza was not named in the policy as a covered auto. Nor did the Impreza qualify as an additional auto, given more than 30 days had elapsed since the Appellants became owners of the Impreza.
Because the Impreza was not a covered auto, the Appellants cannot sustain their claim for breach of contract.
Did Progressive Say Or Do Something To Suggest The 2019 Subaru Impreza Was A Covered Vehicle?
Progressive did not say or do anything that reasonably could have caused the Appellants to believe the 2019 Impreza was a covered vehicle under the terms of the policy. Progressive quoted an increased premium to Mr. Magura, but that was based on the addition of Ms. Neme to the policy. The subsequently-issued declarations page listed both Mr. Magura and Ms. Neme as named insureds, but the only covered vehicle listed was the 2016 Subaru Legacy.
ZALMA OPINION
If a person wishes to insure a new car he or she must advise the insurer of the purchase, the intent to insure it, the vehicle identification number of the vehicle and who was to be the insured. Magura added his wife as an insured but never told the insurer he had purchased and needed insurance for the operation of the 2019 Impreza. Failure to act properly deprived Magura and Neme of insurance coverage.
Just Published
Random Thoughts on Insurance Volume XIV: A Collection of Blog Posts from Zalma on Insurance —
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and [email protected].
Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe.
Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.
Write to Mr. Zalma at [email protected]; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com.
Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/
Convicted Criminal Seeks to Compel Receiver to Protect his Assets
Post number 5291
See the video at and at and at https://www.zalma.com/blog plus more than 5250 posts.
The Work of a Court Appointed Receiver is Constitutionally Protected
In Simon Semaan et al. v. Robert P. Mosier et al., G064385, California Court of Appeals, Fourth District, Third Division (February 6, 2026) the Court of Appeals applied the California anti-SLAPP statute which protects defendants from meritless lawsuits arising from constitutionally protected activities, including those performed in official capacities. The court also considered the doctrine of quasi-judicial immunity, which shields court-appointed receivers from liability for discretionary acts performed within their official duties.
Facts
In September 2021, the State of California filed felony charges against Simon Semaan, alleging violations of Insurance Code section 11760(a) for making...
When There are Two Different Other Insurance Clauses They Eliminate Each Other and Both Insurers Owe Indemnity Equally
Post number 5289
In Great West Casualty Co. v. Nationwide Agribusiness Insurance Co., and Conserv FS, Inc., and Timothy A. Brennan, as Administrator of the Estate of Pat- rick J. Brennan, deceased, Nos. 24-1258, 24-1259, United States Court of Appeals, Seventh Circuit (February 11, 2026) the USCA was required to resolve a dispute that arose when a tractor-trailer operated by Robert D. Fisher (agent of Deerpass Farms Trucking, LLC-II) was involved in a side-impact collision with an SUV driven by Patrick J. Brennan, resulting in Brennan’s death.
Facts
Deerpass Trucking, an interstate motor carrier, leased the tractor from Deerpass Farms Services, LLC, and hauled cargo for Conserv FS, Inc. under a trailer interchange agreement. The tractor was insured by Great West Casualty Company with a $1 million policy limit, while the trailer was insured by Nationwide Agribusiness Insurance Company with a $2 million ...
Opiod Producer Seeks Indemnity from CGL Insurers
Post number 5288
Read the full article at https://lnkd.in/guNhStN2, see the full video at https://lnkd.in/gYqkk-n3 and at https://lnkd.in/g8U3ehuc, and at https://zalma.com/blog plus more than 5250 posts.
Insurers Exclude Damages Due to Insured’s Products
In Matthew Dundon, As The Trustee Of The Endo General Unsecured Creditors’ Trust v. ACE Property And Casualty Insurance Company, et al., Civil Action No. 24-4221, United States District Court, E.D. Pennsylvania (February 10, 2026) Matthew Dundon, trustee of the Endo General Unsecured Creditors’ Trust, sued multiple commercial general liability (CGL) insurers for coverage of opioid-related litigation involving Endo International PLC a pharmaceutical manufacturer.
KEY FACTS
Beginning as early as 2014, thousands of opioid suits were filed by governments, third parties, and individuals alleging harms tied to opioid manufacturing and marketing.
Bankruptcy & Settlements
Endo filed Chapter 11 in August 2022; before bankruptcy it ...
Passover for Americans
Posted on February 19, 2026 by Barry Zalma
“The Passover Seder For Americans”
For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lost the ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah. Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and wonder how did all these wonderful things come into being. Jews believe the force we call G_d created the entire universe and everything in it. Jews feel G_d is all seeing and knowing and although we can’t see Him, He is everywhere and in everyone.We understand...
Passover for Americans
Posted on February 19, 2026 by Barry Zalma
Read the full article at https://www.linkedin.com/pulse/passover-americans-barry-zalma-esq-cfe-5vgkc.
“The Passover Seder For Americans”
For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lostthe ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah.
Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and ...
You Get What You Pay For – Less Coverage Means Lower Premium
Post number 5275
Posted on January 30, 2026 by Barry Zalma
See the video at and at
When Experts for Both Sides Agree That Two Causes Concur to Cause a Wall to Collapse Exclusion Applies
In Lido Hospitality, Inc. v. AIX Specialty Insurance Company, No. 1-24-1465, 2026 IL App (1st) 241465-U, Court of Appeals of Illinois (January 27, 2026) resolved the effect of an anti-concurrent cause exclusion to a loss with more than one cause.
Facts and Background
Lido Hospitality, Inc. operates the Lido Motel in Franklin Park, Illinois. In November 2020, a windstorm caused one of the motel’s brick veneer walls to collapse. At the time, Lido was insured under a policy issued by AIX Specialty Insurance Company which provided coverage for windstorm damage. However, the policy contained an exclusion for any loss or damage directly or indirectly resulting from ...
