Car insurance ruling raises concerns
Woman shouldn't have lost coverage over check, W.Va. justices say
By Bryan Chambers
Some insurance agents in West Virginia are bewildered by a recent
state Supreme Court ruling that says a woman who wrote a bad check to open
an auto insurance policy still deserves coverage after she was involved in
In a 4-1 ruling last week, the high court upheld a 2004 Cabell County
Circuit Court ruling that found West Virginia National Auto Insurance
Company at fault for not giving Stephanie Michelle Conley 10 days' notice
when it rescinded her policy.
Justice Elliott "Spike" Maynard dissented, calling the ruling "one of
the most outrageous court decisions in the history of American
jurisprudence" in his written opinion.
"It's such a poor decision," said C.E. Smith, an agent with Allstate
Insurance in Barboursville. "This person paid nothing, and a bad check
should have voided her transaction. This just fits right into the handout
mentality that so many people have now in this state."
Conley wrote a worthless check for $174 to open an auto insurance
policy with West Virginia National on Aug. 15, 2001. On Aug. 30, 2001, the
insurance company issued the policy, effective for Aug. 15, 2001, through
Feb. 15, 2002.
The next day, Conley was involved in an automobile accident. According
to the lawsuit, her negligence caused injury to three people.
On Sept. 11, 2001, West Virginia National sent a letter to Conley
saying her check had bounced and that it had terminated her policy as of
Aug. 15, 2001.
Dairyland Insurance Co., which had paid nearly $26,000 to the three
people injured in the accident, filed a complaint against Conley for
subrogation, or the substitution of one creditor for another.
Conley, in turn, filed a third-party complaint against West Virginia
National, claiming that the company canceled her policy without giving her
Cabell Circuit Court Judge David Pancake ruled in favor of Conley in
November 2004, and West Virginia National appealed to the state Supreme
Justice Larry Starcher, who wrote the majority opinion, said an
insurance company has the right to rescind policies if the customer fails to
make the initial payment.
"However, the cancellation of the policy can take effect no earlier
than 10 days after notice of the cancellation is provided to the insured,"
West Virginia National now must cover the costs of the automobile
accident, or attempt to prove that Conley was not at fault.
In his dissenting opinion, Maynard wrote that the case is an example
of many other "something for nothing" cases filed by plaintiffs in West
Virginia, "where someone, somewhere, somehow must owe them money simply
because they have suffered an injury."
"The majority had to work hard to write an opinion that actually does
everything that the law should not do," Maynard wrote. "It punishes the
innocent by causing honest, hard-working West Virginians to pay higher auto
insurance premiums. At the same time, it rewards the guilty by providing a
windfall to those who never paid for insurance coverage."
Maynard's written opinion is mirrored by Mike McAlister, an agent with
Maynard Insurance in Barboursville. The ruling could encourage some to take
advantage of the state's insurance laws, which McAlister says are rarely
For example, McAlister said, auto insurance companies are not required
to notify the state Division of Motor Vehicles when a policy is rescinded
"If someone has to renew their driver's license and has no insurance,
all they have to do is come in and take out an insurance policy," he said.
"In the past, people have gotten by with one month's payment and then we
won't see or hear from them again until they have to renew their license. It
now appears they can get by with a bad check."
McAlister said he also fears that the ruling will prompt some
insurance companies to adopt 10-day waiting periods for new policies so a
customer's check can clear.
"That would punish the honest customer who might not want to wait and
look to other carriers" he said.
David Caudill, an agent with First City Insurance in Huntington, said
the ruling sends a disturbing message to consumers that they can get auto
insurance by passing a bad check. It also is discouraging to insurance
carriers who are thinking about setting up shop in West Virginia, he said.
"But I'm not surprised by the ruling, because a lot of companies
authorize their agents to bind coverage without payment (up front)," Caudill
said. "Once you do that, the insurance policy is a legal contract until the
requirements of cancellation are fulfilled. It's up to the agent, the
insurance carrier, or both, to notify the customer when that happens."
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Jabroni Inc. Bringing you the CRAP since 1995!!!
So instead of giving the 10 days' notice as required by law, the
insurance company gave -26 days' notice?
This decision looks like it was decided correctly on the facts of law to
me. If the insurer has concerns that the initial payment may be invalid,
they should wait until the payment clears before affirming coverage.
Elliott "Spike" Maynard for Supreme Court!
Unless you're a humorless, politically correct liberal, in which case:
I marked for the name.
> I thought the conservatard right didn't like judges to attempt to
> legislate from the bench? Or does that not apply when the conservatard
> right agrees with the "activist judge"?
... Kiss my ass humorless liberal bitch.
Why are you getting behind an "activist judge"?
> I have a sense of humour - I also enjoy poking holes in the hot-air
> balloon that is conservatard hypocrisy.
I'm sure they're scared shitless of you