Insured May not Assume Coverage Exists if the Insured Fails to Order Collision Coverage
Walter Alvarez appealed the trial court’s entry of summary judgment in favor of Pinnacle Insurance Group of Indiana, Inc. (“Pinnacle”) and Joyce Helsel (“Helsel,” and together with Pinnacle, “Defendants”) on his complaint seeking recovery for damage to one of his automobiles. In Walter Alvarez v. Joyce Helsel & Pinnacle Insurance Group of Indiana, Inc., Court of Appeals Case No. 20A-CT-632, Court Of Appeals Of Indiana (September 16, 2020) the Court of Appeals considered a claim from Alvarez that the addition of collision coverage was automatically added after he started driving his Ferrari 458 (the “Ferrari 458”).
On September 27, 2016, Alvarez was involved in a single vehicle accident while driving the Ferrari 458. He sued Defendants alleging that he had a vehicle insurance policy with Pinnacle and that due to the negligent acts and/or omissions of Helsel, he was forced to personally incur $242,000 in property damage and repair estimates for the Ferrari 458 which he had reasonably believed and trusted he was insured for collision coverage.
The trial court entered an order which granted Defendants’ summary judgment motion. Since he did not drive the Ferrari 458 regularly and would store it for long periods of time Alvarez would limit coverage to comprehensive and only change the coverage to collision and comprehensive when he expected to drive the Ferrari 458. The changes were effected with the agent, Helsel, by e-mail, fax, directly from Alvarez or one of his employees.
Alvarez does not allege Helsel had a duty to unilaterally modify insurance coverage on the Ferrari or other vehicles owned by Alvarez without his direction and consent.
On September 28, 2016, the day after the accident, Alvarez, though his employees, requested Helsel to upgrade coverage from comprehensive to collision for all of his vehicles that only had comprehensive coverage, including the Ferrari. Alvarez alleges Helsel had a duty to send him an “Acord Change Form” when he made the request for the insurance declaration on September 21, 2016 (before the accident), and she negligently failed to do so. As a result of her negligence, Alvarez sustained damages when he drove his vehicle with inadequate insurance coverage at the time of the accident.
Alvarez failed to allege any facts or legal authority to support his claim that Helsel had a duty to provide him with an “Acord Change Form” in the absence of any request to do so before the accident.
The moving party bears the initial burden of making a prima facie showing that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. Any doubt as to any facts or inferences to be drawn therefrom must be resolved in favor of the non-moving party.
Alvarez argues that the trial court erred in finding it was not reasonably foreseeable and anticipated that he would drive the Ferrari 458 six days after receiving notice that his insurance was limited and in finding that there was no genuine issue of material fact concerning the parties’ relationship and business practices with respect to his automobile insurance. He contends there was a consistent, ongoing pattern of written correspondence and phone calls between himself and Helsel, where “insurance Change Forms, even before signing, had an ‘Effective Date of Change’ that was the day the change was requested, permitting Alvarez to reasonably believe coverage had been restored to a vehicle on the date of request, not any subsequent date.”
Helsel and Pinnacle maintain that Alvarez never asked for collision coverage to be added for the Ferrari 458 prior to the accident. They argued that numerous times after collision coverage was taken off the Ferrari 458 in 2015, Alvarez was informed there was no collision coverage on the Ferrari, including on September 21, 2016, and since there was no request to reinstate the coverage, there can be no liability for the failure to do so.
The designated evidence included an affidavit by Helsel in which she stated she faxed a message on February 5, 2016, to remind Alvarez that the Ferrari 458 and other vehicles had only comprehensive coverage at the upcoming renewal day of March 17th; faxed a second request on February 23, 2016, for confirmation of the previous fax; faxed and emailed messages on March 15, 2016, notifying him again that the Ferrari 458 and other vehicles had only comprehensive coverage, to which he responded and indicated receipt; and received a memo indicating Alvarez did not want to add collision coverage on the Ferrari 458.
She also stated that on March 22, 2016, an employee of Alvarez called and asked to confirm the coverage on certain vehicles, she sent a text message to Alvarez which referenced the March 15th messages “showing all vehicle coverages” and stated “No changes since last week,” and she sent a copy of the current declarations that showed the Ferrari had comprehensive coverage only.
While Alvarez asserts that he orally requested full coverage be restored to the Ferrari 458 on September 21, 2016, he failed to cite to the record that this is a misstatement and it is unsupported by the record and the only request was the day after the accident. Alvarez does not point to designated evidence that either he or one of his employees requested, either verbally or in writing, that collision coverage be added for the Ferrari before the September 27, 2016 accident and after his December 8, 2015 request that collision coverage be dropped for the Ferrari.
Based upon the designated evidence, and there being no genuine issue of material fact the judgment of the trial court was affirmed.
Insurance is a contract that requires, for coverage to apply, a fortuitous event during the policy period. In this case, Alvarez, a lawyer, should have known that it is improper and fraudulent to seek insurance the day after an accident. Insurance is not, without the payment of an excessive premium, retroactive. The court found that the presentation of the claim that he asked for coverage before the accident that he misstated the facts. The court was kind to not note that Alvarez attempted a fraud and wasted the time of the trial court and the court of appeal.
© 2020 – Barry Zalma
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 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 52 years in the insurance business. He is available at http://www.zalma.com and firstname.lastname@example.org.
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