An insurance agent, insurance broker or employee of an insurance company should never give information to an insured without being certain that the information is true and accurate. In this case, an employee of the insurer advised the insured by phone that premium had been paid by electronic transfer when in fact it had not.
Read Barry Zalma's previous column, “Don't change a policy.”
Based on the lack of payment, Wisconsin Mutual Insurance Co. declared the policy had lapsed before an accident and denied coverage. After trial, Wisconsin Mutual appealed a judgment preventing it from denying coverage for Jean George's automobile accident based on her failure to pay the premium. Wisconsin Mutual claimed that her husband's testimony regarding a Wisconsin Mutual employee who assured the premium had been paid was insufficient to establish estoppel and incredible. The Wisconsin Court of Appeals agreed with the trial court that the equitable remedy of estoppel prevented Wisconsin Mutual from denying the claim.
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