Failure to Read Insurance Policy was Devastating

Nov 23 2018      On Behalf of  David M. Duree & Associates, P.C.      Uncategorized

Homeowners purchased insurance from American Family Insurance in 2012 because of a promise that the policy would be equal to or better than their previous policy with Travelers Insurance Co, which provided liability coverage for defamation. The American Family policy did not provide coverage for defamation. More than 2 years later (the policy was renewed) the Homeowners were sued for defamation. They demanded that American Family defend the lawsuit, but it declined because the policy did not provide defamation coverage. The Homeowners sued for negligent failure to provide a policy with equal or better coverage than the Travelers policy. The Illinois Supreme Court, in a 5-2 decision, ruled that the 2-year Statute of Limitations for negligent procurement began when the Homeowners received, and could have read, the policy, not when the defamation lawsuit was filed. The Court reasoned that the homeowners could have read, and understood, the policy when it was received. The decision assumes that most homeowners, upon reading, can determine the coverages provided, and that most homeowners actually read their policy before a claim arises. American Family Insurance v. Krop ( Ill. Sup. Ct., Oct. 2018)