Articles Posted in Insurance Dispute

Collision insurance covers car damages caused by driving-related accidents. For example, colliding into an object or another car, whether the insured driver caused this accident or not, are covered damages. Due to this breadth of possibilities, insurance companies write strict requirements into their policies, including the need to have a valid driver’s license on hand during an accident. A recent case in Louisiana involved Affirmative Insurance Company (“Affirmative”) denying collision coverage to an insured driver who did not have his license on him during a car accident on the intersection of Lapalco Blvd. and Ames Blvd. in Marrero, Louisiana.

Darryl Parker bought an Affirmative auto insurance policy for his 2001 BMW in 2013 with a $500 collision coverage deductible. At the time, Mr. Parker told the Affirmative agent that he had no valid driver’s license; however, the agent assured Mr. Parker that he could still purchase the policy without one. Mr. Parker was subsequently involved in a collision. Affirmative denied covering Mr. Parker due to his not having a license at the time of the accident, and Mr. Parker filed a lawsuit against Affirmative. Affirmative argued that a clause in the insurance contract barred coverage, while Mr. Parker argued that this provision should be void because Affirmative sold him insurance knowing that he was unlicensed at the time.

The Louisiana trial court granted Affirmative’s motion to dismiss the case; Mr. Parker appealed, and the issue before the Louisiana Fifth Circuit Court of Appeal (“the Court”) was whether the “barring” clause in the insurance policy was enforceable.

When an employee is in an accident while driving the company’s car, is the company’s insurer liable? Generally, an employer is liable for employee accidents when driving a company car for employment duties. This can be difficult to determine in situations such as when an employee is on call and operating a company car, when the employee drives the company car at night, or when the employee drives the car on a personal errand with passengers. An accident involving St. Tammany Parish helped shed light on these issues.

On May 26, 2010, Gary Michael Brown, an employee of J&J Diving Corporation, was involved in a car accident with a St. Tammany Parish Sheriff’s department vehicle driven by Deputy Scott Jarred. Mr. Brown was driving a company car at the time of the accident with his girlfriend as a passenger. While Mr. Brown was not legally intoxicated, a field sobriety test indicated that he had been drinking before the accident. Before the accident, Mr. Brown had gone to retrieve his driver’s license from Gulfport, Mississippi after a company drag race event.

Jarred settled his claims with Brown, J&J Diving and Progressive, the company’s primary insurer. However, Mr. Jarred later added XL Special Insurance Company and Valiant Insurance (“Underwriters”) who insured J&J Corporation with a Marines Excess Liability Policy (“excess commercial insurance policy”) as defendants. The trial court granted Mr. Jarred’s motion for summary judgment and found the Underwriters were liable for the accident under J&J Diving Corporation’s excess commercial insurance policy. The Underwriters appealed, arguing that their insurance policy did not cover Mr. Jarred’s accident.

While many steps may be taken to prevent accidents, most are, unfortunately, unpredictable. For many people, automobile insurance is the silver lining to unforeseeable car accidents. However, the type of insurance policy you have can determine how much of the accident is covered, if it is covered at all, so it is important to understand exactly what you sign up for and always double check for changes. This issue was explored in a case brought to the Twenty-Fourth Judicial District Court for the Parish of Jefferson.

Through an independent insurance agent, Agent C, Mr. B. had car insurance from Allstate Insurance Company. For this plan, Mr. B signed an underinsured/uninsured motorist (“UM”) waiver, which declined all UM coverage. Mr. B married Bridget B in January of 2007 and the following month, Mrs. B went to Agent C’s office to change the insurance policy. She did not meet with Agent C and instead requested the office staff add UM coverage to the policy. No documents were signed and when Mr. B called Agent C to confirm the policy’s changes, there was no mention of UM coverage. In July, the Bs received correspondence from Allstate with the alterations to their insurance and included a declarations page disclosing the coverage included in the plan. Both Mr. and Mrs. B retained their insurance documents and renewed it bi-annually, but did not review the declarations page in detail.

In March of 2012, the B family got into a car wreck. When they filed an insurance claim against Allstate, they were surprised to hear that UM coverage was not part of the policy. The Bs filed a lawsuit against Agent C and Allstate, for not adding UM coverage to the policy. Agent C filed a motion for summary judgment, stating that based on the facts of the case the Bs would not be able to prove their allegations. See La. C.C.P. art. 966 (2017). In his motion, Agent C argued that the Bs’ claim was barred by the peremptive period, which requires all causes of action against insurance agents to be brought within one to three years. See La. R.S.9:5606 (2011).

When insurance coverage doesn’t pay enough money to compensate a victim for injuries suffered in a car accident, underinsured motorist coverage exists to fill in the gaps. Louisiana law requires that insurance companies provide this coverage. La. R.S. 22:1295. Although this seems like a simple solution for undercovered individuals, many people are unaware that this type of insurance does not benefit every possible person who may be affected by a car accident; an insurance policy’s contract ultimately determines who and what the policy might cover. This common misperception was at issue in a case that arose in Caddo Parish.

In Texas in 2013, Helen Stopak was killed in an automobile accident while riding in a car owned by one of her daughters. The driver’s insurance company (Safeco) paid $30,000 in benefits to her daughters, one of whom was Lori Marshall. Soon afterward, Mrs. Marshall attempted to claim underinsured motorist benefits from her own husband’s insurance policy provided by the Louisiana Farm Bureau Casualty Insurance Company (the Farm Bureau). She believed she was entitled to damages under her underinsured motorist insurance policy for wrongful death and for her own mental distress since her mother had been in an underinsured car. The Farm Bureau refused to pay and she sued. The trial court ruled in favor of the Farm Bureau. Mrs. Marshall appealed.

At issue in the Court of Appeal was whether Mrs. Marshall’s mother was insured under the policy. If so, the Farm Bureau would be obligated to pay out its benefits. Even if not specifically mentioned in the policy, the law requiring underinsured motorist coverage acts as if it is part of the insurance contract. Some insurance policies simply include the wording of the statute in order to provide underinsured motorist coverage. A contract can, however, provide for exceptions to these payments, such as not extending it to people or cars not actually under the policy. Lafleur v. Fidelity & Casualty Co. of New York, 385 So.2d 1241 (La. Ct. App. 1980).

Uninsured motorist (UM) liability coverage is additional coverage that can pay for injuries to individuals protected under your policy, including family members in other cars and passengers in your insured cars, resulting from a car accident caused by an uninsured driver. However, this additional coverage can be modified or inapplicable if the insured decides to reject coverage, select lower limits, or select economic-only coverage, which would only cover costs, not non-monetary damages, such as pain and suffering or quality of life damages. UM coverage is also part of most businesses insurance policies. All of these options allow for insurance policies to be flexible, and whatever a policy stipulates is what it will cover, but as a case that arose in the Parish of St. Landry shows, writing and reading an insurance policy isn’t always straight-forward.

In October of 2011, Crystal Bell was driving a company car, owned by Compass Behavioral Center for Crowley, when she was rear-ended by Merlyn Rodgers. Crystal Bell and the occupants of her vehicle filed a lawsuit against Merlyn Rodgers and her insurance company. After filing the lawsuit, the plaintiffs amended their complaint by naming Compass’ insurance company, Progressive Insurance Company, as a defendant in order to claim UM coverage.

Prior to the accident, in 2007, a Compass representative, Mark Cullen, had signed a CSL automobile insurance policy with Progressive for $1 million in liability coverage. A CSL policy sets a predetermined limit for the combined total of the Bodily Injury Liability coverage and Property Damage Liability coverage per occurrence or accident. Under Louisiana law, UM coverage must be applied through an Uninsured/Underinsured Motorist Bodily Injury Coverage form, which is issued by the Commissioner of Insurance. La. R.S. 22:1295. This form, however, lacked a space for addressing CSL policies. So, Cullen initialed the box that stated he selected UM coverage but wrote in “$100,000” for coverage and marked out “each person” and wrote in “CSL.” Cullen did this even though the form indicated that it may not be altered or modified. Progressive filed a motion for summary judgment and asked that the district court rule that the policy in place at the time of the accident was only for $100,000. The plaintiffs’ filed a counter-motion for summary judgment. The plaintiffs argued that Compass’ UM form was invalid and therefore UM coverage provided for $1 million in coverage. Alternatively, plaintiffs argued that if the UM coverage form was valid, then it was for $100,000 per person as opposed to only $100,000 for each CSL accident.