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Insurance Agency Prevails against former Client on Claim that Occurred after Non-Renewal

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Insurance Agency Prevails against former Client on Claim that Occurred after Non-Renewal

 

In this insurance agent negligence matter, the plaintiff homeowners alleged that the defendant insurance agent verbally advised them that he would secure coverage for them after the insurance company refused to renew their homeowner's insurance due to numerous adverse claims. The plaintiffs contended that they relied to their detriment on this statement and were without insurance coverage when an electrical fire broke out in their home causing approximately $20,000 in damage. The defendant insurance agent denied any such conversation and maintained that due to the numerous claims filed by the plaintiff homeowners he did not want to continue to do business with them so would not have made any such representation.

The plaintiffs had been customers of the defendant insurance agency, off and on, for about ten years. In August, 2007, the agency had written a homeowners policy for the plaintiffs with Merrimack Mutual Insurance. On May 30, 2009, Merrimack Mutual Insurance notified the defendant that they would not renew the plaintiff's policy due to numerous adverse claims. On June 2, 2009, the plaintiff received a notice from the insurer advising of the non-renewal effective August 7, 2009.

The plaintiff wife alleged that upon receipt of the notice from the insurance company she immediately contacted the defendant agent who she said informed her not to worry that he would find coverage for her and her husband before the policy end date of August 7th. On August 13, 2009, an electrical fire broke out in the plaintiff's house. The plaintiffs notified the insurance company and were informed that their policy had lapsed, as indicated in the June notice, on August 7, 2009. The plaintiffs alleged $20,000 in damages from the fire.

The plaintiffs brought suit against the defendant insurance agent alleging negligence in failing to secure coverage as he indicated to them that he would do and in permitting their insurance coverage to lapse without advising them that they were, in fact, without insurance coverage for their home. The defendant denied the allegations and maintained that he had no such conversation with the plaintiff wife. Furthermore, the defendant maintained that he did not desire to continue doing business with the plaintiffs and would not therefore; under any circumstance, make any such promise to the plaintiffs. This was due to the plaintiffs' adverse claim history and history of non-payment of insurance premiums. The matter proceeded to trial over the period of one day. At the conclusion of the trial, the jury deliberated approximately two hours and returned its verdict in favor of the defendant and against the plaintiffs.

Reference

Bahatouris vs. Bean Insurance Agency LLC. Case no. 218-2010-CV-00443; Judge Kenneth McHugh, 12-03-12.

Attorney for plaintiff: Shenanne R. Tucker of Bouchard Kleinman & Wright P.A. in Hampton, NH. Attorney for defendant: Joseph F. Collins of Law Office of Joseph F. Collins in Salem, MA.

Commentary

The trial judge permitted the plaintiff's motion in limine to exclude the evidence of the plaintiff's prior seven claims for damages under their insurance policies. The trial judge, however, did allow evidence of the Notice of Non-Renewal to include its reason, which was adverse claims history. The trial judge also allowed the plaintiff's motion in limine to exclude the plaintiffs' history of cancellation for non-payment of premiums. The plaintiffs had 18 instances where they had failed to make premium payments which supported the defendant's assertion that he no longer desired to do business with the plaintiffs.

The defendant objected to this and argued that this evidence was relevant and corroborated the defendant agent's testimony that he did not intend to seek alternative coverage for the plaintiffs and therefore, would never have had such a conversation with the plaintiff wife. Despite these rulings, the testimony at trial was strong enough to secure a defendant's verdict in a short amount of time. The plaintiffs did not appeal the jury's verdict.


The case(s) cited herein was(were) reprinted with the permission of the publisher Jury Verdict Review Publications, Inc. www.jvra.com

These real life claims scenarios and jury verdicts  are sponsored by InsuranceNewsletters.com, the premier provider of client newsletters for Insurance Agencies. While AgencyEquity.com will feature cases that are of interest to insurance agencies, InsuranceNewsletters.com content will focus on cases that are of interest to insurance consumers. Properly educating clients on real life situations helps them better understand the need for proper liability coverage. To learn more, go to InsuranceNewsletters.com.

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