Rejection of UIM Cover by Agent Valid
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Post 4786
IBrandon Lawrence appealed the trial court’s order finding Progressive Northern Insurance Co. (Progressive) made a valid, meaningful offer of underinsured motorist (UIM) coverage to his agent, Ashley Outlaw.
In Progressive Northern Insurance Co. v. Brandon Lawrence and Ashley Outlaw, No. 2024-UP-127, Appellate Case No. 2020-001245, Court of Appeals of South Carolina (April 17, 2024) the Court of Appeals explained the law of agency and its relationship to insurance.
FACTS
From 2008 to 2013, Lawrence and Outlaw lived together in the same house with their son; they never married. They split the household expenses, but Outlaw paid the bills and took care of any insurance needs. On August 19, 2009, Outlaw purchased an insurance policy from Progressive to cover Lawrence’s motorcycle; however, Lawrence did not discuss obtaining UIM coverage with Outlaw, nor did he read the policy, did not have any involvement in obtaining the policy, and did not have any contact with Progressive.
The application for the insurance policy was mailed to Lawrence and Outlaw. It listed Outlaw as “Married” and as an “Insured” and Lawrence as “Married” and as Outlaw’s “Spouse.” On September 5, 2009, Outlaw signed the application form and rejected Progressive’s offer of UIM coverage. Outlaw paid the premium for the policy, and Lawrence reimbursed her.
In May 2013, Lawrence was involved in a motorcycle accident. On August 12, 2016, Progressive filed a declaratory judgment action and sought a determination that UIM coverage was offered to Lawrence through his agent, Outlaw, and that Lawrence was bound by Outlaw’s rejection of UIM coverage. The trial court found Lawrence was bound by Outlaw’s rejection of UIM coverage because Lawrence appointed Outlaw as his agent to obtain the policy. Lawrence testified in his deposition and at trial that he knew Outlaw was getting insurance; that he asked her to do so; and that she had his permission to do so.
LAW, ANALYSIS, AGENCY
The Court of Appeals noted that it is well-settled that the relationship of agency between a husband and wife is governed by the same rules which apply to other agencies, and no presumption arises from the mere fact of the marital relationship that one spouse is acting as agent for the other. An agency relationship may be, and frequently is, implied or inferred from the words and conduct of the parties and the circumstances of the particular case.
Therefore, the Court of Appeals held that an agency relationship existed between Lawrence and Outlaw and that Outlaw’s rejection of UIM coverage bound Lawrence. Lawrence stated he assumed Outlaw would purchase UIM coverage, he did not discuss such optional coverage with her, read the policy, check to see if the policy included UIM coverage, or have any contact with Progressive himself. Lawrence gave Outlaw the authority to obtain the insurance policy, and he is bound by Outlaw’s rejection of UIM coverage. To hold otherwise would allow Lawrence to benefit from Outlaw’s procurement of the policy but not be bound by her rejection of UIM coverage.
MEANINGFUL OFFER OF UIM COVERAGE
Automobile insurance carriers must, by statute, “offer, at the option of the insured, underinsured motorist coverage up to the limits of the insured liability coverage . . . .” S.C. Code Ann. § 38-77-160 (2015).
Progressive’s application included the words “Underinsured Motorist Coverage” and several paragraphs that explained what such coverage entailed. Additionally, the information about UIM coverage offered by Progressive was not found in a separate form, the UIM information and rejection form was included within the main application that Outlaw received and signed.
Progressive made a meaningful offer of UIM coverage to Lawrence’s agent, Outlaw.
Progressive’s offer of UIM coverage was made through a form it sent to Lawrence by mail. Progressive’s offer of UIM coverage specifically outlined the limits. Progressive intelligibly advised Outlaw, who acted as Lawrence’s agent, of the UIM coverage.
Outlaw had experience purchasing insurance in the past by regularly handling the insurance needs of the household.
ZALMA OPINION
It’s sad that Lawrence was injured by an underinsured motorist and could not recover from his motorcycle policy because his “wife” rejected Progressive’s offer of UIM coverage as his agent for the motorcycle policy and other insurance policies for their “family.” The case ignored the fact that she lied on the application about a material fact claiming that Outlaw and Lawrence were married, when they were not. If that was a fact material to the decision of Progressive to issue the insurance it could have declared the policy void for material misrepresentation of fact or rescind the policy. Not necessary because there was no UIM cover.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Three Cases Dismissed Because of Suit Against an Insurer who Did Not Insure the Plaintiff
Read the full article at https://lnkd.in/gwy59pYF, see the full video at https://lnkd.in/gAGT2vrJ and at https://lnkd.in/g2JEXuk8, and https://zalma.com/blog plus more than 4800 posts.
Post 4804
Texas Law Firm McClenny, Moseley & Associates (MMA) has had serious problems with the US District Courts in Louisiana and what appears to be an effort to profit from what some Magistrate and District judges indicate may be criminal conduct to profit from insurance claims relating to hurricane damage to the public of the state of Louisiana. In April and May several cases have been the subject of motions for Summary Judgment from insurers who were sued by MMA who was sanctioned by the District Courts and new lawyers took over the cases only to find the plaintiffs had no right to sue since they were not insured by the insurer defendants. For a representative sample note the information from the following three cases:
1. In Ave ...
Insurance for State of Delaware Waives Sovereign Immunity
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Post 4803
On February 15, 2023, Kimberly Letke (“Plaintiff”) filed a pro se Complaint against Defendant Matthew Sprinkle (“Sprenkle”) for defamation and malicious prosecution. On October 3, 2023, Plaintiff filed another Complaint added Defendants Cpl. Tyler Beulter of the DNREC police (“Beulter”) and the Attorney General of Delaware, Kathleen Jennings (“Jennings”), in which she added three additional claims: false arrest and violations of public trust, unlawful detention, and violations of her rights under the Fourth Amendment to the United States Constitution.
In Kimberly Letke v. Matthew Sprenkle, CPL. Tyler Beulter, and Attorney General Kathleen Jennings, C.A. Nos. S23C-10-019 CAK, S23C-10-002 CAK, Superior Court of Delaware (May 6, 2024) the court was faced...
Force Placed Insurance Charges Allow Special Defense to Foreclosure
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Post 4802
In an action to foreclose a mortgage the trial court granted in part the plaintiff’s motion to strike the defendant’s special defenses and counterclaim; subsequently, the court, Cirello, J., granted the plaintiff’s motion for summary judgment as to liability only; thereafter, the court, Spader, J., rendered judgment of foreclosure by sale, and the defendant appealed.
In M&T Bank v. Robert R. Lewis, No. SC 20817, Supreme Court of Connecticut (April 30, 2024) the appeal of a foreclosure judgment presented one question important to insurance professionals: Whether allegations of impropriety in a mortgagee’s force placement of property insurance arise from the making, validity or enforcement of the mortgage for purposes of a special defense to a foreclosure ...
After Health Provider Entity's Management is Arrested for Fraud Reporting Suspicion to Beneficiaries is not Defamation
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BrainBuilders, LLC appealed from an order granting summary judgment in favor of defendants Optum, Inc., et al (collectively, defendants) in Brainbuilders, LLC v. Optum, Inc., Optum Services, Inc., et al, No. A-0621-22, Superior Court of New Jersey, Appellate Division (April 19, 2024) resolved claims of defamation.
FACTS
Letters dated July 25, 2017 and August 2017 sent by the Optum entities to BrainBuilders' patients following an investigation into purported fraud by individuals associated with BrainBuilders.
BrainBuilders provides healthcare services to children on the autism spectrum. As an out-of-network or non-participating healthcare provider, BrainBuilders receives reimbursement for claims only if a patient's health ...
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ZIFL-04-01-2024 Volume 28, Number 7
Post 4766
Zalma’s Insurance Fraud Letter (ZIFL) continues its 28th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma.
This month's issue contains multiple articles for the insurance fraud professional and the insurance claims professional. The current issue can be read in full at https://lnkd.in/gBj_3yVw and includes the following articles:
Prison Employee Commits a Crime She Was Employed to Prevent
GUILTY OF WORKERS’ COMPENSATION FRAUD
On January 10, 2022, defendant Tiffinie Marvell Jones was convicted by a jury of one count of insurance fraud. Jones filed a motion for a new trial, which was denied. On appeal, Jones argued that there was insufficient evidence to support the verdict, that her trial counsel provided ...
Indicators of Insurance Fraud are Investigative Tools
Barry Zalma
Mar 27, 2024
Read the full article at https://lnkd.in/gvtv9gCz where you can see more red flags, see the full video at https://lnkd.in/gMirVfZc and at https://lnkd.in/g2ndng5r and at https://zalma.com/blog plus more than 4750 posts.
Post 4763
Suspicious claims have common attributes. Insurers and their anti-fraud organizations have collated the common attributes into lists of indicators or red flags of fraud. The lists were created as training aids and to be used to determine whether further investigation is required to determine if a claim is legitimate or false and fraudulent. Continually growing, these lists are known as the “red flags” or “indicators” of fraud lists. There are many different categories, ranging from those associated with the claim itself or with insureds to indicators of specific types of fraud, such as bodily injury fraud or arson for profit.
If, when assessing a claim, three or more red flags are found the need for further investigation should be considered and evaluated by the claims person, a supervisor and the insurer’s special investigative unit. The...
