Florida Appellate Court Reviews Insurance Coverage by Estoppel in Car Accident Case

In most Florida car accident cases, courts look at the insurance policy and apply contract law to determine whether or not an insured has a claim to a benefit within the plan. In rare circumstances, injured parties have been able to claim they have insurance coverage by estoppel. This only occurs if the insurance company made a representation of material fact, the injured party reasonably relied on this representation, and the injured person was prejudiced because of this reliance.  A recent appellate case (Case No. 1D15-4700) reviewed whether or not a company was insured through estoppel following a serious car accident, resulting in the death of one person and the injury of another person.

The Court of Appeal determined it did not, looking at Florida case law for guidance on what is required. One of these cases, 930 So. 2d 643 (2006), provides a detailed example of what leads to insurance coverage by estoppel. In this lawsuit, a family purchased a family health insurance policy from a company through an agent. Eventually, this company was acquired by another company, selling policies under its own name. During the entire period in question, the family purchasing the policy did so through the same agent.

The original policy had liability limits of $2 million, a deductible of $500, and coverage for organ transplants. This policy was purchased for several years in a row. At the end of the fourth year, the family sought to renew, and the agent told them that they could lower their insurance premiums by reducing the policy limits from $2 million to $1 million and raising the deductible from $500 to $1,000. The agent told the family that aside from those changes, they would have the same coverage and benefits as previously provided. Relying on this information, the family purchased the new plan.

Two years after the second plan was purchased and the second company had taken over the first, the matriarch of the family became ill, needing a liver transplant. The insurance companies were notified and initially indicated that the transplant would be covered. Soon afterward, the insurer notified the family that the policy in fact did not cover the transplant. Four years later, the mother died, and the insurer refused to pay any of the medical expenses incurred by the family for her care.

The trial court granted the defendant insurers’ motion to dismiss, and the family appealed. The appellate court agreed with the family that a jury could find they had reasonably relied on the assertions by the agent that they would have the same coverage. While some of the dismissals were upheld, the court ultimately held that the family could pursue claims against the parent insurance company and its subsidiary.

A Florida car accident attorney at Donaldson & Weston aggressively pursue all avenues of legal relief. We understand the financial strain that medical bills place on a family, and we can tirelessly work to assist you with your claim. Call our office today at 772-266-5555 or 561-299-3999 for a free, confidential consultation.