Undisclosed Intent Does Not Change the Wording of a Policy

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Insurance policies are contracts that are interpreted by their plain meaning. An insured is bound by the terms and conditions of the insurance policy. In Progressive Mountain Insurance Company v. Mobile Maintenance On The Go, LLLP, Helene Julien, USDC, N.D. Georgia, Atlanta Division (June 17, 2022) an insured cannot claim that the policy provides a coverage that was not agreed to by the parties to the contract of insurance.

The parties disputed whether an insurance policy, issued by Petitioner to Mobile Maintenance on the Go, LLLP (“Mobile Maintenance”), provided coverage for injuries sustained by Helene Julien (“Julien”) following a 2018 car accident involving an uninsured motorist. Petitioner, the insurer, sued seeking a Declaratory Judgment against Mobile Maintenance, Julien and Jesse Espinoza that it did not owe Uninsured Motorist, Underinsured Motorist or Med Pay Coverage. The insurer filed a motion for summary judgment.

FACTUAL HISTORY

On October 15, 2018 a Honda Civic-driven by Brandon Donald, an uninsured motorist-struck Julien when she was walking from the grocery store to her daughter’s house. Julien sustained severe injuries in the accident.

The Policy named Mobile Maintenance as the insured, and premium payments for the Policy were made via electronic transfers from Mobile Maintenance’s bank account. When applying for the Policy, Jesse Espinoza represented that the vehicle to be insured was used only for business purposes.

ANALYSIS

The insurer argued that it is entitled to summary judgment because Julien is not an “insured” under the terms of the Policy.

Julien was indisputably a pedestrian when she was struck by an uninsured motorist and thus falls outside the applicable definition of “insured.”

As the facts show, the Policy was issued to Mobile Maintenance, premiums were paid from Mobile Maintenance’s account and Jesse Espinoza represented that the vehicle (a 2007 Dodge Ram) under the Policy would be used only for business purposes.

Jesse Espinoza was presumed to know the Policy’s terms. As a result, the insurer does not owe Respondents any coverage obligation with respect to any claim arising from the October 21, 2018 accident because Helene Julien is not an “insured” under the terms of the Policy.

ZALMA OPINION

Equity allows an insured to reform the wording of a policy if it was issued in error because of a mistake of fact or fraud. In this case the alleged mistake was unilateral.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, is available at http://www.zalma.com and [email protected].

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