Butler was first case where a failure to procure insurance was brought under
insurance and contract theories and the court dismissed plaintiff’s claims
based on 2-year (negligence) statute of limitations, stating that “the nature or
substance of the cause of action is negligence in failing to obtain a particular
type of insurance coverage.” The court also determined that plaintiff’s claim
accrued at the latest when they received their policy, and they knew or should
have known they did not have that coverage they claimed they wanted.
Parker v. State Farm Mut. Auto. Ins. Co., 630 N.E.2d 567 (Ind. Ct. App. 1994)
Customer brought action against insurer and agent for breach of duty to advise re:
the availability and desirability of underinsured motorist coverage. Court held that
agent did not have a duty to advise insureds and insureds failed to allege any facts
that would support a long-established relationship of entrustment other than fact
that insureds first purchased insurance from insurer 15 years earlier. Court held
that it’s the nature of the relationship b/w insurer and insured, not merely the
number of years, that triggers the insurer’s duty to advise. Court discusses Cook
and the special relationship test and finds that parties talked over telephone, had
only 1 face to face meeting, no specialized coverage or that agent promised to
undertake periodic review of insureds needs, no advice, no additional
compensation. The Court affirmed summary judgment in favor of State Farm.
Parker distinguished Cook, clarifying that “it is the nature of the relationship
and not merely the number of years associated therewith, that triggers the
duty to advise.” Parker was the first case to identify and articulate the 4-
factor special relationship test.
Craven v. State Farm Mut. Auto. Ins. Co., 588 N.E.2d 1294 (Ind. Ct. App. 1992)
Plaintiff insurance customer obtained automobile insurance from a State Farm
agent that covered $100,000 per person and $300,000 per accident, with uninsured
motorist coverage of $25,000 per person and $50,000 per accident. The plaintiff
was involved in an accident with an uninsured motorist; State Farm paid the
$25,000 limit, but denied any additional coverage. Plaintiff sued agent and insurer
claiming, among other things, that he failed to advise her that she was buying only
$25,000 uninsured motorist coverage, that $25,000 was less uninsured motorist
coverage than that afforded under her previous policy, and that she could purchase
more than $25,000 of uninsured motorist coverage. The court discussed special