Plaintiffs, Charles Faber and Karen Faber, filed suit against insurance agencies and related individuals, claiming insurance malpractice. Defendants moved for summary judgment on the basis that Plaintiffs’ claims were barred by the statute of limitations. Plaintiffs responded that the limitation period was tolled because Charles could not reasonably have discovered the alleged insurance malpractice until a date within the limitations period because a reasonable person does not read his or her insurance policies. Summary judgment was entered for Defendants on grounds that Plaintiffs’ claims were time-barred under the three-year limitation period for insurance malpractice claims. The Supreme Court affirmed, holding that Plaintiffs’ claims against Defendants were untimely.
This is an insurance malpractice case, a case in which the plaintiff claimed that it was insurance malpractice to fail to include uninsured motorist coverage in his umbrella policy. The court rejected this claim because the insurance company sent notices to the plaintiff explaining exactly what coverage he had purchased. Because the change in coverage (dropping the uninsured motorist coverage) occurred in 2002, the statute of limitations had long expired before the Plaintiff filed suit.
For the October 2002 to October 2003 term, Dr. Faber’s automobile insurance was written by Vigilant Insurance Co. (Vigilant) and included $5,000,000 of underinsured motorist bodily injury (UM) coverage. It is alleged that, in late 2002, Dr. Faber inquired with McVay as to whether a different carrier could provide the same coverage for a reduced premium; it is further alleged that McVay reported to Dr. Faber that he could obtain the same coverage and lower his premium payments by contracting with Progressive Insurance for $250,000 in UM coverage and with Vigilant for an umbrella policy of $5,000,000 that also included UM coverage. However, during her deposition, McVay relayed a different version, stating that she informed Dr. Faber that the policies were different and that they would “come back and bite him in the a**.” Nonetheless, Dr. Faber directed McVay to make this change, which reduced his premium by $4,951. The policy changes became effective on December 11, 2002. The umbrella policy with Vigilant provided for $5,000,000 in excess liability only, but it did not include UM protection.
Accordingly, the operative date for the commencement of the running of the statute of limitations certainly was no later than December 11, 2002, the date listed on the first coverage update. Because the complaint was filed nearly seven years later, it was untimely. As a result, plaintiffs’ claims against McVay, Wickford, Gordon, and Marketing Associates were untimely and summary judgment was appropriate.
We also conclude that the plaintiffs’ claims against Albright and M&S equally are untimely. Doctor Faber received notice of the renewed automobile policy, effective February 22, 2006, and the limitation period commenced on that date and ran until February 23, 2009, almost six months before the complaint was filed. We note that Albright and M&S also argue that the claims against them were dismissed pursuant to a consent judgment that may not be set aside absent agreement of the parties. Having concluded that the statute of limitations is dispositive of this appeal, we need not address the consent judgment.
Note that I removed the footnotes from the quoted section.
Comment: Arguing that you don’t have a duty to read your insurance policy is an argument that is never going to work in a common law state. Source: Faber v. McVay