When Should You Not Take A Coverage Position That Is Arguably Available?

One of the first, and often hardest lessons claims adjusters and lawyers have to learn about evaluating insurance coverage is this: just because you can take a position doesn’t mean you should.  The theoretical can’t overwhelm the practical, or in other words, the "right answer" is not always the right solution.  I’m reminded of this when I see cases like Reed v. Tennessee Farmers Mutual Insurance Co., 2006 WL 842908 (Tenn. App. March 30, 2006).

Unless there is more to the case than meets the eye, I’m at a loss to figure out why the insurer fought its denial of a $10,000 death benefit to the Court of Appeals.  From what is visible in reading the case, it appears to be the type of thing that builds antipathy to insurance companies.  In the case, Karen Durham was driving and was killed in a car crash.  No other vehicles were involved.  When the Tennessee Highway Patrol arrived, Ms. Durham’s body had already been taken from the vehicle so paramedics could, as the case says without elaboration, "extract a small child who was trapped underneath the decedent’s body."   The police officer’s report, based on information he received from others, said Ms. Durham had her seat belt on.  Her auto policy would pay the death benefit only if a police report was submitted saying she was buckled up.  Her estate submitted the officer’s report, but the insurer apparently had other information that Ms. Durham was not in her seat belt, and denied the claim.

The Court of Appeals affirmed the trial court’s grant of summary judgment for Ms. Durham’s estate.  The appeals court said it was undisputed the report stated Ms. Durham had worn her seat belt, and therefore the policy terms were satisfied and the extrinsic evidence was irrelevant.  One side note:  while the court’s ruling was well-written and well-reasoned, it always jumps out at me in cases like this when a court discusses the death of a human being in completely clinical terms.  Particularly where a woman’s dead body had to be pulled off her living child, it wouldn’t cross the boundaries of judicial propriety and impartiality to acknowledge that this was a "horrific accident," a "tragedy" or even a "sad" or "regrettable" incident.

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