Woodland Hills personal injury lawyer Barry P. Goldberg cringes when interviewing a client and hearing the response “I have Full Coverage.” While it certainly beats “I have no coverage” or “I have minimum coverage”, it really provides less information than clients think. In fact, there is no accepted array of automobile insurance that qualifies as “Full Coverage.” Does the coverage include Medical Payments, Rental Car, and Uninsured Property Damage Deductible Waiver”?
Perhaps more importantly, many people mistake “Full Coverage” for “Maximum Coverage.” Even then, it is not generally accepted what “Maximum Coverage” means. It may mean to some that at least some coverage was purchased for every possible category of insurance coverage. On the other hand, “Maximum Coverage” may mean the highest possible limits offered by that particular insurer. A recent case demonstrates the problem created.
A terribly injured motorcyclist was injured by an automobile drive that carried California’s minimum bodily injury liability coverage of $15,000 per claim. The motorcyclist was under the impression that he was well covered for the “Underinsured” situation because he had asked his insurer GEICO to give him “Full Coverage” or “Maximum Coverage”, he did not recall exactly. He contended that the GEICO representative told him “Don’t worry, you are fully covered.” As it turned out, the motorcyclist purchased the minimum Uninsured/Underinsured Motorist coverage of $15,000 per claim and $30,000 per accident. Accordingly, GEICO contended that no “Underinsured” situation was presented. Unfortunately, the motorcyclist was out of luck because the insurer had no duty to advise him of what coverages were needed and what limits were appropriate. The request for “Full Coverage” or “Maximum Coverage” was too vague to bind the insurer. (Ahern v. Dillenback (1991) 1 Cal.App.4th 36, 42 (Ahern).
The law has developed in this area that “as a general proposition, an insurance agent does not have a duty to volunteer to an insured that the latter should procure additional or different insurance coverage.” (Fitzpatrick v. Hayes (1997) 57 Cal.App.4th 916, 927 (Fitzpatrick).) “The rule changes, however, when . . . there is a request or inquiry by the insured for a particular type or extent of coverage . . . .” (Id.) “An insurance agent has an ‘obligation to use reasonable care, diligence, and judgment in procuring insurance requested by an insured.’ [Citations.]” (Desai v. Farmers Ins. Exchange (1996) 47 Cal.App.4th 1110, 1119 (Desai).) However, the request must be sufficiently “targeted” or “specific” before an insurance agent will be held to have undertaken such an obligation. (Fitzpatrick, at pp. 928-929.) “[I]n the ordinary case, ‘the onus is . . . squarely on the insured to inform the agent of the insurance he requires.’ ” (Wallman v. Suddock (2011) 200 Cal.App.4th 1288, 1309 (Wallman), Emphasis added.)
Ahern and Fitzpatrick provide excellent guidance. The plaintiffs in Ahern told their insurance agent that they wanted an overseas automobile policy that provided “full coverage or ‘the best coverage that exists.’ ” (Ahern, supra, 1 Cal.App.4th at p. 40.) They made a claim under the policy after Mrs. Ahern suffered injuries in a hit and run collision with an unidentified and uninsured motorist in France. The insurer denied the claim. The Aherns sued the agent and the insurer for negligence. (Id. at p. 41.) The appellate court affirmed summary judgment for the defendants. The court held that the agent did not assume a duty to procure uninsured motorist coverage for the Aherns or to advise them of its availability where the undisputed evidence showed that “Joan Ahern was generally unaware of uninsured motorist coverage and the subject did not come up” when she and her husband purchased the policy. (Id. at p. 42.)
The plaintiffs in Fitzpatrick sued their insurance agent and the insurer for negligence after a serious accident with an underinsured motorist left them with expenses that exceeded their coverage limits. (Fitzpatrick, supra, 57 Cal.App.4th at p. 918.) They contended that their longtime agent knew that they “generally wanted the upper limits of coverage” yet failed to advise them that they could obtain a personal umbrella policy at little additional cost. (Id. at pp. 927-928.) They argued that they “‘relied on’ ” the agent to advise them about adequate coverage, “‘and he led [them] to believe that the automobile coverage that was previously carried was fine.’ ” (Id. at p. 928.) The appellate court affirmed summary judgment for the defendants. The court observed that the Fitzpatricks’ “conclusory statement” that they relied on the agent’s advice lacked “any allegation concerning any sort of specific inquiry” to the agent “much less specific advice in the opposite direction.” (Id.) The lack of “any sort of targeted inquiry by [the Fitzpatricks] or advice by [the agent]” defeated the Fitzpatricks’ claim that the agent knew or should have known that they wanted a personal umbrella policy. (Id. at pp. 928-929; see also Wallman, supra, 200 Cal.App.4th at pp. 1311-1312 [“Plaintiffs’ vague requests for insurance that would protect them in the event of ‘any possible lawsuit that could happen in the future’ ” were insufficient to apprise the agent that plaintiffs “wanted excess insurance for past years or for properties they no longer owned.”].)
Accordingly, the courts find that requests for “full” or “maximum” coverage are analogous to the vague and conclusory requests in Ahern, Fitzpatrick, and Wollman. Therefore, the injured motorcyclist’s request for “full” or “maximum” coverage is not sufficiently targeted or specific to impose a duty on the GEICO sales representative to procure additional underinsured motorist coverage. (Fitzpatrick, supra, 57 Cal.App.4th at pp. 928-929.)
As a practicing personal injury lawyer and insurance coverage expert, Barry P. Goldberg recommends two solutions to this growing problem. 1) Driver’s should look at their policy coverages and request particular limits from insurance companies. 2) Driver’s should obtain an “Independent” insurance agent that can advise them, not only on the best deals, but how much coverage is appropriate given the driver’s particular finances and life circumstances.