Insurers are Only Obligated to Provide the Insurance Ordered

Insured Must Take Responsibility For His Policy

Insurance is a contract between the insurer and the person insured. Insurance companies sell to the insured the coverage requested. Insurers have no obligation to force, or even advise, the insured about the limits of liability of automobile liability insurance that should be carried by the insured. Rather, the insurer is obligated only to provide the insurance coverages ordered.

Charles F. Cohan And Lisa K. Cohan v. United Services Automobile Association, No. 683 EDA 2016, Superior Court of Pennsylvania, 2017 WL 57152 (1/5/17) Dr. and Mrs. Cohan tried to get a court to provide liability limits that was not ordered because they believed, as long term customers, they should have been advised to carry higher limits.

Dr. Charles F. and Lisa K. Cohan (Cohans) failed to convince the trial court who dismissed their suit with prejudice.


In 1984, while he was a captain in the United States Army, Charles Cohan purchased an automobile insurance policy from USAA with a $100,000.00 per person liability limit. He maintained the policy with the same coverage limits through 2011. He married Lisa Cohan in 1995 and added her to the auto policy as an “operator.” The Cohans never advised USAA that they should increase their automobile liability coverage.

In 2002, The Cohans purchased land and built a new home. On December 6, 2002, they purchased homeowner’s insurance from USAA with liability coverage in the amount of $1,000,000.00 per occurrence.

Lisa Cohan, while driving a Cohan vehicle, collided with another vehicle, causing the driver fatal injuries. The administrator of the estate of the decedent brought a wrongful death/survival action and USAA defended the action on behalf of Ms. Cohan. The matter settled for $300,000.00, but USAA paid only the policy limits of $100,000.00. The Cohans paid the remainder of the settlement amount.

On April 1, 2015, the Cohans sued USAA claiming that it should have advised Dr. Cohan to increase the auto liability policy limits over the years that he was a customer, and requesting judgment in the amount of $200,000.00. USAA filed preliminary objections, which the trial court granted by order and opinion and it dismissed the complaint with prejudice.


  1. Did the trial court err in holding that despite their twenty-seven year, multi-policy insurer-insured relationship and USAA’s targeted affinity group based marketing, USAA had no duty to coordinate the Cohans liability coverage across their policies or to reform the liability limits of their auto policy?
  2. Did the trial court err in granting USAA’s preliminary objection demurrer to the Cohans’ Unfair Trade Practices and Consumer Protection Law allegations holding that the Cohans must plead that they were “lied to” and that USAA’s targeting affinity group based advertising program was “puffery”?


Pennsylvania courts have often stressed that the insured has both the capacity and the duty to inquire about the scope of insurance coverage, rather than rely on hand holding and substituted judgment.” No justification in the law to impose the additional burden on insurers that they anticipate and then counsel their insured on the hypothetical, collateral consequences of the coverage chosen by the insured. The basic contractual nature of insurance coverage requires fair dealing and good faith on the part of the insurer, not hand holding and substituted judgment.

While appellate courts acknowledge insurance is an area in which the contracting parties stand in somewhat special relationship to each other, the relationship is not so unique as to compel this Court to require an insurer to explain every permutation possible from an insured’s choice of coverage. Each insured has the right and obligation to question his insurer at the time the insurance contract is entered into as to the type of coverage desired and the ramifications arising therefrom. Once the insurance contract takes effect, however, the insured must take responsibility for his policy.

The trial court found that USAA did not have a duty to advise the Cohans to purchase higher liability limits on their auto insurance policy, regardless of the terms in the separate homeowner’s policy. The trial court was correct that USAA had no obligation to advise the Cohans of a disparity in liability coverage that they should have been aware of, or to otherwise “coordinate” or “equalize” the liability limits of two different policies. To the contrary, once the insurance contract takes effect the insured must take responsibility for his policy. The Cohans’ argument, that the two policies should have been “equalized,” overlooks the salient fact that an automobile insurance policy and a homeowner’s insurance policy are not coextensive and insure against very different risks.

The purpose of the Unfair Insurance Practices Act (UIPA) is to regulate trade practices in the business of insurance in accordance with the intent of congress by defining or providing for the determination of all such practices in this state which constitute unfair methods of competition or unfair or deceptive acts or practices and by prohibiting the trade practices so defined or determined.

There is no evidence to suggest, and the court had no reason to believe, that the system of sanctions established under the UIPA must be supplemented by a judicially created cause of action.


The Pennsylvania court refused – properly – to substitute itself as a parent for the Cohans. The court correctly found that the duty to decide the coverages to be purchased from an insurer is the obligation of the insured not an insurer or a court.

ZALMA-INS-CONSULT                      © 2017 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 49 years in the insurance business.

Mr. Zalma is the first recipient of theLEGEND-TROPHY-2 first annual Claims Magazine/ACE Legend Award.

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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