In many cases, insurance reps are looking to do one thing. And it’s usually not in your best interests. Ken explains.
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Specificity may specifically save insurance coverage disputes
Skaperdas v. Country Casualty Insurance Co., 2015 IL 117021
As a general rule, everyone has a duty to exercise ordinary care. When we fail to do so and someone else gets injured, we may be liable for the damages. This is true for businesses as well, and, in the case of Steven Skaperdas, his insurance agent. Skaperdas bought auto insurance from Country Casualty Insurance Company. His fiancée was subsequently involved in an accident while driving one of Skaperdas’s covered vehicles. Country covered the loss, but instructed Skaperdas to add his fiancée to the policy.
Skaperdas met with a Country insurance agent and requested that his fiancée, Valerie Day, be added to the policy. The agent added “female, 30-64” onto the declarations page. Later, Valerie’s son was riding his bike when he was hit by a car and severely injured. The driver’s insurance coverage did not cover the medical costs. Skaperdas and Day sought coverage from Country under their underinsured policy. Country denied the claim, reasoning that neither Day nor her son was listed on the policy.
Skaperdas and Day sued Country and the insurance agent. The circuit court dismissed the claim and the appellate court reversed. The agent and Country appealed to the Illinois Supreme Court. The Court’s decision looked closely at whether an insurance agent has a duty to exercise ordinary care and skill in selecting the insurance coverage requested by a customer. The Illinois Supreme Court said that an insurance agent does have a duty in certain situations.
The Court found that when a customer asks an insurance agent for a specific coverage—in this case, Skaperdas asked for coverage for his fiancée—then the agent has a duty to procure specified coverage. If the agent fails to do so, the agent is responsible for the injuries that follow. The Court noted that this duty only arises when the customer asks for specific coverage.
The Court relied on Melrose Park Sundries, Inc. v. Carlini, a case detailing a business owner asking her insurance agent to ensure that, “all requirements for insurance [were] taken out, including the building, *** the liquor, any type of liability policy.” 399 Ill. App. 3d 915, 917-18 (2010). The business owner did not specifically request or receive workers’ compensation insurance, as required by law. The business owner sued, arguing that the agent did not exercise ordinary care when procuring insurance. The Court found that because she did not specifically ask for workers’ compensation insurance, that the relevant insurance statute did not apply. Therefore the agent did not owe duty of ordinary care.
Additionally, the Court found that pursuant to the doctrine of respondeat superior, Country could be held liable for the tortuous actions of its agent, even if Country did not engage in tortuous activity.
The lesson: It’s important to ask for specific coverage when buying or renewing your insurance. Make sure to ask your agent about all policies and endorsements available, so that you can determine what to ask for, specifically.
Think twice before waiving rental insurance
Founders Ins. Co. v. Walker, 2015 IL App (1st) 141301
Car Rental Insurance: Waiving coverage could leave you waving goodbye to your bank account.
Insurance companies are pushing the “pick-your-own-plan” or “you-pick-the-price, we-pick-the-coverage” idea to consumers as a smart and simple way to lower insurance costs. They reduce their premium in exchange for dropping certain coverages. Alternatively, comprehensive plans provide much wider coverage by charging a higher premium. The discounted non-comprehensive plans are certainly viable options to consider to cut rising insurance premiums for some, but in the case of Sybil Morrison, it ended up leaving her without coverage.
Sybil rented a car from Enterprise and, like many of us often do, waived the insurance offered by Enterprise. Sybil had a non-comprehensive insurance plan with Founders. She bought, among other things, liability insurance that covered bodily injury and property damage, but contained an exclusion provision for rentals. She did not purchase the physical damage coverage, which would have included collision coverage.
On May 6, 2012, the car Sybil rented was damaged in a hit-and-run accident. She made a claim with Founders, which was denied because Sybil’s plan did not include collision insurance. Sybil and Enterprise argued that the claim should be covered under the liability coverage. Founders disagreed, reasoning that liability coverage protects the insured against injury and loss to others whereas collision insurance protects loss or injury to the insured’s own vehicles. Because Sybil did not purchase collision insurance she was not entitled to coverage. Additionally, even if Sybil’s claim falls under liability coverage, the section contains a rental property exclusion provision.
The Court held that Sybil’s claim should have been covered under the liability coverage, but that the exclusion provision precluded insurance coverage for damages to rental cars. The Court explained that liability coverage typically includes damage to other’s property and not damage to the insured’s own car. In other words, liability coverage should cover the insured in instances when she can be sued for damages (i.e. held liable). One cannot sue themselves for damages, so typical liability coverage does not apply to damages to one’s own car.
This instance being atypical in that the damaged car was not the insured’s own car but belonged to Enterprise. Enterprise could, and in-fact did, sue Sybil for damages to that car. Sybil could be held liable for damages and therefore this claim should have been covered by the liability insurance. However, the exclusion provision still applied and coverage was properly denied.
The Court, additionally, pointed out that exclusion provisions’ purpose is to allow for lower insurance premiums in exchange for minimal liability coverage. They continued that Sybil could have avoided this loss simply by either purchasing a more comprehensive insurance plan from Founders or purchasing insurance from Enterprise.
Before waiving rental car insurance, make sure you have coverage. Otherwise, you could end up with the repair bill for the car.
Can’t waive what you can’t foresee
Offord v. Fitness Intern., LLC, 2015 IL App (1st) 150879
Herbert Offord entered a LA Fitness with a guest pass. While playing basketball, Herbert allegedly slipped on water and fell, injuring his knee. Herbert sued LA Fitness alleging negligence and willful and wanton conduct. Plaintiff Herbert alleged that he slipped on water that leaked in from the roof. Defendant LA Fitness argued that the negligence count was barred by the guest waiver that the plaintiff had signed. Trial court found he Plaintiff signed the waiver and that the exculpatory clause that released LA Fitness from all liability arising from use of their facilities barred the negligence count. Plaintiff filed a motion to reconsider, was denied and then filed an appeal.
The appellate court reasoned that because the scope of an exculpatory clause is defined by the foreseeability of the specific danger and should strictly construed against the benefitting party that the Plaintiff could not have possibly foreseen that a leak from a defective building would cause his injury. The language used by LA Fitness is a standard use of language to cover incidents that involve gym members using equipment and the facilities, not to shield itself from injuries resulting from defects in the structure of their building.
A dissenting opinion from Justice Connors criticized the majorities “extremely tenuous distinction” between contemplating the source of the injury and contemplating the type of injury. Justice Connors argued that slipping on water is a risk commonly contemplated by gym goers and the point of the release is to put the plaintiff on notice of the range of dangers for which he assumes the risk to allow him to exercise greater caution. Therefore, Herbert should have exercised greater caution of the risk of slipping on a wet gymnasium floor, regardless of whether the wetness came from sweat, a water bottle or a leaky roof. The case was remanded back to circuit court.
Hurdles in sports injury cases
Pierscionek v. Illinois High School Ass’n, 2015 WL 6550826 (1st Dist. 2015). 2014-CH-19131
The Honorable Leroy K. Martine, Jr. of Cook County’s Chancery Division dismissed both counts of a lawsuit brought on behalf high school student athletes against Illinois High School Association. The Plaintiffs alleged that IHSA failed to minimize the risk of concussions or to act in a way that would do the same. The Plaintiffs argued that IHSA’s policies have not kept up with the latest science and research on concussion prevention in minor athletes. Plaintiffs asked the Court to force the IHSA to update its policies to reflect the most recent science on concussion prevention and to have the IHSA establish a fund to pay for medical monitoring of the high school student athletes.
While what the Plaintiffs ask for sounds like a good idea, having the Court impose pure policy changes is improper. The Court found the Plaintiffs were essentially asking the Court to take the place of the legislature. The separation of powers argument was persuasive on its own but was also supported by insufficient pleadings.
Illinois is a “fact pleading” state, which means lawsuits must allege facts that can be proven and, when taken together, lead to conclusions that are supported by law. When a complaint merely contains conclusions or facts that cannot be proven, or when either are not supported by law then the complaint does not properly plead facts and will be dismissed. The Court found that the majority of Plaintiff’s complaint contained conclusions rather than factual allegations capable of being proven which made it insufficient. ISHA made seven arguments that Plaintiff’s complaint should be dismissed with prejudice and the Court agreed with all but one.
If you were me…
Ken stresses the importance of building a relationship instead of focusing on bold promises and the allure of big settlement histories. It’s important to know whether your lawyer has tried similar cases before. It’s important to know that you’ll be spending a lot of time with your lawyer. It’s important to feel comfortable dealing with the same person on a regular basis. It’s important to have some kind of bond.