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The doctrine of reasonable expectations does not apply



Another case to lead a horse to water but not be able to make him drink.

When an agent declares to a foreign owner of a home that homeowners insurance is not available and that residents must have their own insurance, the agent cannot force it to be insured to buy what is needed. When a loss occurs, the insured sucks the agent because they did not buy what they needed and there was no coverage available. The only fact that there was no coverage available does not create a reasonable expectation of coverage without evidence to support it.

Everyone can invoke one thing to action. Proving that it is true is more difficult. In Francine Hamilton and Raymond Hamilton, the plaintiff appellants against Deborah Galati, Albert Galati and Patricia Galati, Defendant and Deborah Galati, Third Party Owner v. First Brokers Insurance and Farm Insurance Company Flemington, Third Party Defendant-Defendant, Doc No. . A-5462-1

6T1, the Supreme Court of the New Jersey Appellate Division (May 9, 2019) a suit was allegedly correct, but evidence was impossible.

FACTS

Albert and Patricia are Deborah's parents. They bought a home for her and her children. After Deborah moved into the property, she acquired an Alaskan Malamute dog, who broke free from her outer seal and attacked Francine Hamilton, causing personal injury.

Before Malamuten attacked Francine Hamilton, around the time Deborah moved into the property Patricia, First Brokers contacted homeowners insurance for Deborah's house. Bonnie Bowen, a first real estate agent, explained that Patricia couldn't get the homeowner's coverage because she didn't live there. Instead, Bowen was willing to issue a housing / fire policy, but this would only cover Albert and Patricia for losses to the property.

Bowen suggested that Deborah separately rented rental insurance. Patricia told Bowen that Deborah did not pay rent, but Bowen reiterated that she should have the tenant insurance. Patricia testified in the deposit that she thought the tenant's insurance only covered the value of the contents, did not understand that it would have left Deborah's property liability coverage because it was never explained to her, and thus she did not encourage Deborah to get it. Deborah did not pick up tenant insurance.

The court judgment was in favor of farmers and first brokers since the policy unambiguously defined "insured" as covering only Albert and Patricia. He felt that the policy language design was "really a common language type situation, and there is no need for any further description. You cannot define each word in a policy, and that is one of the words I do not think you have to define. "Since the terms of the insurance policy are to be given its purely meaning, in the absence of ambiguity, Deborah was not an additional insured.

The judge also concluded that the insured could not reasonably expect to include their daughter in the definition of "insureds" when living in another household. He did not consider Deborah to be a third party recipient or that the broker or insurance company had an obligation or other obligation to her on the basis of telephone calls from her mother.

ANALYSIS

Words in an insurance policy must be given their usual, common meaning. In the absence of ambiguity, courts should not write for the insured a better insurance policy than the one purchased. There is an ambiguity where the average policyholder would not be able to determine the coverage limits.

To be covered by the policy, the extra insured must be resident in Albert and Patricia's households. There is no ambiguity in the term "household" and Deborah did not live there.

Deborah does not fall within the term "resident" or she was also a member of Albert and Patricia's "household". There is no ambiguity here. The doctrine of "reasonable expectations" is simply not applicable.

Equity will grant rewording of an insurance where there is a mutual error or if a party's mistake is accompanied by fraud or other unpredictable behavior by the other party. The record revealed that Patricia made no mistake about the extent of the coverage; she only made assumptions and no further inquiries. Albert and Patricia deliberately bought a housing / fire policy, and knew that it would only cover them and not Deborah. Deborah did not get a tenant's policy suggested by the broker. There was no mutual mistake.

Hamiltons argued that since Albert and Patricia now have a new insurance policy on Deborah's home and note Deborah as an "extra insured" policy, it was actually possible for First Broker and Farmers Insurance to have added Deborah as an "extra insured" . They argue that brokers and the insurer's failure to do so in the beginning is a violation of the duty of administration.

Here, First Brokers agent was clear about the type of insurance she provided to Albert and Patricia. She was clear that the policy only covered Albert and Patricia and that Deborah would have to get her own policy. While the agent could have recommended another policy whereby Deborah could be added as an "additional insured party," the agent did not claim any obligation to Deborah. Her failure to do so does not lead to a breach of obligation. That the agent and the carrier owed Albert and Patricia did not translate into an obligation to Deborah.

The proposal for a meeting was judged correctly in this case. The judge based his decision on the relevant law and took into account all evidence-based evidence.

In this case, the only policy issued was a residential fire policy that did not insure third party liability and only the owners of the insured, not resident, Deborah. The Malamut's actions that caused damage – even though there was a liability insurance – would only apply to the owners, not their daughter who lived in the home, rented herself free. Deborah could have followed the agent and was covered by Malamut's attack. This is a stupid waste of court time.


© 2019 – Barry Zalma

This article and all the blog posts on this site, melt and summarize issues published by the courts of the various states and the United States. The court decisions have been modified from the actual language of the court decisions, condensed to facilitate reading and convey the author's views in each individual case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance management, bad faith assurance, and insurance fraud nearly equal 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 cover and law firm and more than 50 years in the insurance industry. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual liability magazine / ACE Legend Award.

Over the past 51 years, Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their claims to become insurance managers.

"Arson-for-Profit Fire at Cowboy Bar & Grill"

A true crime novel based on the perception of the author, Barry Zalma, who for over 51 years has acted for insurers facing the fire brigade, one of the most dangerous insurance fraud. The book explains how an insurance accountant, working with a fire protection and origin expert, a forensic accountant and insurance consultant, could defeat a system of urgent gain and get a judgment that requires the offender not to take anything and pay back

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