United Fire & Cas. Co. v. Victoria
| Decision Date | 22 April 1998 |
| Docket Number | No. 96-1451,96-1451 |
| Citation | 576 N.W.2d 118 |
| Parties | UNITED FIRE & CASUALTY CO., Appellant, v. Mabel VICTORIA, Roger Victoria, Victor Victoria, State Farm Mutual Insurance Company and Timothy John Hatting, Appellees. |
| Court | Iowa Supreme Court |
Joseph Fitzgibbons and Ned A. Stockdale of Fitzgibbons Brothers, Estherville, for appellant.
James R. Christoph and Scott Dunn, Boulder, CO, William Kevin Stoos of Klass, Stoos, Stoik, Mugan, Villone & Phillips, L.L.P., Sioux City, for appellees Mabel Victoria, Roger Victoria, Victor Victoria, and State Farm Mutual Insurance Company.
Patricia L. Vogel of TePaske, Rens, Rensink & Pluim, Orange City, for appellee Timothy John Hatting.
Considered by McGIVERIN, C.J., and LARSON, CARTER, SNELL, and ANDREASEN, JJ.
United Fire & Casualty Co. filed this declaratory judgment action to determine the extent of coverage provided by its policy in which Mabel Victoria was the named insured. United contends that an automatic termination clause in the policy relieves it from any liability because the Victorias had purchased "similar" insurance from another company. In the alternative, United argues that a "family exclusion" in the policy relieves it from any liability to family members who were injured while occupying the insured car. The district court ruled against United on both issues. We affirm on the "similar" insurance termination issue, but reverse on the court's order for "novation" of the policy to eliminate the family member exclusion.
While Mabel and her husband were residents of Goldfield, Iowa, Mabel purchased this policy from United. The policy period was October 29, 1993, to April 29, 1994. On January 4, 1994, the Victorias moved to Longmont, Colorado. On February 1, 1994, Mabel wrote to her United agent in Goldfield and told him of their new address. She informed him that one of the couple's cars should be deleted from the policy because it had been transferred to their son. She inquired about receiving a refund for that vehicle. In addition, Mabel wrote
On April 25, 1994, Mabel applied for coverage with State Farm Mutual Automobile Insurance Company through a Colorado agent. State Farm bound insurance coverage as of that day. The United policy was not set to expire until April 29, 1994, so for five days the Victorias were ostensibly covered by both the United and State Farm policies. During this period, on April 28, 1994, Mabel, Victor, and their son Roger, who was driving, collided head-on with a car driven by Timothy Hatting. Hatting was injured, as well as Victor and Roger. Mabel was killed.
After the accident, Victor and Roger Victoria filed claims with United. United and State Farm initially treated the claims as being subject to proration because of the apparent existence of coverage under both of the policies. The driver of the second car, Timothy Hatting, made a claim against the Victorias, and United and State Farm began the process of negotiating with Hatting's insurance company with a view toward prorating his claims as well. United now claims that it has no coverage under its policy.
United first argues that it has no coverage because the policy was automatically terminated when the Victorias became insured by State Farm. United relies on this clause in its policy:
If you obtain other insurance on "your covered auto," any similar insurance provided by this policy will terminate as to that auto on the effective date of the other insurance.
United argues that, while the policies are different in some respects, they are nevertheless "similar" for purposes of the automatic termination clause. They say this is so because the policies cover the same vehicle and provide the same general type of coverage even though there were differences in the policies, such as the limits of liability.
The Victorias respond that (1) this automatic termination clause violates Iowa Code section 515D.4 (1993), which provides the "permitted" grounds for cancellation of a policy; (2) the automatic termination provision is so ambiguous and confusing that it is unenforceable; (3) United is estopped from enforcing it; (4) there was no proof of the insured's intention to cancel the United policy by buying a replacement policy; and (5) the United and State Farm policies were not "similar." Because we resolve the issue on the fifth argument, the lack of similarity of the policies, we do not address the remaining arguments raised by the Victorias.
The United policy does not define "similar." United argues that policies with different limits of liability are nevertheless "similar" for purposes of this clause if they provide the same general type of coverage. Here, United's policy provided liability coverage of $250,000 per person and $500,000 per accident, while State Farm's limits were $100,000 and $300,000, respectively. United argues that an insured can obtain lower limits of liability under a second policy and still have "similar" coverage.
It might well be the understanding of an insurance professional that these policies are similar. However, to an average policy buyer, a policy with substantially lower limits would not likely be viewed as "similar." When the consequences of buying a similar policy are so serious as to cause an automatic termination, an insured should be informed as to what constitutes "similar" coverage. We have said that, "[w]hen interpreting ambiguous words in insurance contracts, the language should be interpreted from the viewpoint of an ordinary person, not a specialist or expert." Steinbach v. Continental W. Ins. Co., 237 N.W.2d 780, 782 (Iowa 1976).
As one court concluded in a similar case,
"[s]imilar" is not defined by the policy and may be used in English to mean the "same" or "identical" though it is defined as "showing...
To continue reading
Request your trial
-
California Dairies Inc. v. Rsui Indemnity Co.
...similar to trigger a terminating clause simply because they both provide first party liability insurance); United Fire & Casualty Co. v. Victoria, 576 N.W.2d 118 (Iowa 1998) (finding the term "similar" ambiguous and rejecting auto insurer's argument that, despite differences between two pol......
-
American Family Mut. Ins. Co. v. Petersen
...1998). When two reasonable interpretations exist, the policy is construed most favorably to the insured. United Fire & Cas. Co. v. Victoria, 576 N.W.2d 118, 120-21 (Iowa 1998); see also State Auto. & Cas. Underwriters v. Hartford Accident & Indem. Co., 166 N.W.2d 761, 763 (Iowa 1969) (when ......
-
Malecek v. State Farm Mut. Auto. Ins. Co., C040012LRR.
...most favorably to the insured." Am. Family Mut. Ins. Co. v. Petersen, 679 N.W.2d 571, 576 (Iowa 2004) (citing United Fire & Cas. Co. v. Victoria, 576 N.W.2d 118, 120-21 (Iowa 1998); State Auto & Cas. Underwriters v. Hartford Accident & Indem. Co., 166 N.W.2d 761, 763 (Iowa 1969) (noting whe......
-
Krause v. Krause
...such a challenge would fail because we have upheld the validity of family member exclusions in the past. See United Fire & Cas. Co. v. Victoria, 576 N.W.2d 118, 121 (Iowa 1998) (upholding family member exclusion in auto insurance policy); Principal Cas. Ins. Co. v. Blair, 500 N.W.2d 67, 69 ......