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Quote of the Day - There are worse things in life than death. Have you ever spent an evening with an insurance salesman? - Woody Allen

Limitation, Schmitation. Who knew?

We love to hate it, mostly because we have to pay for it and may never use it. But when we need it, and the company turns us down or somehow limits our coverage, we're none too happy about it.

Of course, I'm talking insurance here. In this instance, Farmers automobile insurance. Farmers issued a policy to an unsuspecting customer, who promptly loaned his car to someone else. His limits were $250,000 for liability.

Unfortunately, Farmers limited coverage in that instance. To $15,000. Likewise unfortunately, our unsuspecting customer didn't know about the limitation. It wasn't listed on the Declarations page of the policy by name, but rather by endorsement number, buried deep down in the policy, and in a single line. Plus, the letter transmitting the policy was buried several pages down, but it didn't describe the limitation either.

Our California Supreme Court didn't think that was fair, so they struck the limitation. Said it had to be posted conspicuously so the customer could know about it in advance.

The nice thing is that this ruling applies not only to personal automobile policies, but all types of insurance policies. Score one for the good guys.

Posted by J. Craig Williams on Tuesday, May 18, 2004

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