Supreme Court allows Farm Bureau to re-write insurance policy
Rodney Daniels asked his insurance agent to re-write his auto insurance policy to bring down the price. The agent complied, but mistakenly boosted Daniels' liability coverage from $20,000.00 to $300,000.00. Subsequently, Daniels caused a motor vehicle collision, apparently, resulting in the death of Thomas Couture. When the Couture family attempted to collect the proceeds of Daniels' liability coverage, however, Daniels' insurer, Farm Bureau, discovered the re-write mistake in its agent's paperwork, and sought to "reform" the policy to reduce the available liability coverage. Daniels and Couture's family fought to preserve the $300,000.00 of coverage and the Court of Appeals ruled last fall that Farm Bureau had no basis to "reform" the policy it wrote.
This week the Michigan Supreme Court over-turned the Court of Appeals' decision and authorized Farm Bureau to reduce its payout from the contracted amount down to $20,000.00. While the Court of Appeals had determined that there was no evidence of a mutual mistake involving Daniels and his insurer because Daniels had not expressed any preference about the level of liability coverage to be purchased, the Supreme Court adopted the dissenting judge's conclusion that by inference Daniels wanted lower premiums and lower coverage.