Opinion ID: 2045567
Heading Depth: 1
Heading Rank: 4

Heading: Vacancy

Text: The policy of insurance purchased by Huff contained a provision that Travelers would not be liable for any loss occurring while the building was vacant for a period exceeding sixty days. It is undisputed that the building was vacant beyond the sixty-day period, the home being put up for sale after Huffs' daughter moved out in June, 1969. Huffs' previous insurance was canceled because of the vacancy, and they sought other insurance from Travelers while the home was for sale. Huff maintains that Travelers is estopped to assert this provision or impliedly waived it, by the actions of its agent, Mr. Brown. There was evidence that when Huff purchased this insurance, she told Mr. Brown that the home was vacant. This evidence was uncontroverted. Travelers maintains that neither waiver nor estoppel may be used to broaden the scope of coverage of an insurance contract. Ordinarily, Travelers would be correct that neither the doctrine of implied waiver nor estoppel is available to bring within the coverage of an insurance policy, risks which are excepted by its terms. Ky. Cent. Life & Acc. Ins. v. White (1939), 106 Ind. App. 530, 19 N.E.2d 872; 16A Appleman on Insurance § 9090 (1968). The doctrine has been questioned and overturned in numerous jurisdictions. Harr v. Allstate Ins. Co. (1968), 54 N.J. 287, 255 A.2d 208. United Pacific Ins. Co. v. Meyer (9th Cir.1962), 305 F.2d 107; Ivey v. United Nat. Indem. Co. (9th Cir.1958), 259 F.2d 205; Farmers Mut. Auto Ins. Co. v. Bechard (1963), 80 S.D. 237, 122 N.W.2d 86. In this state it is limited in its application, and the doctrine is inapplicable to the present case. This means simply that by the application of the doctrine of implied waiver or estoppel the policy that provides indemnity for a broken arm could not be broadened so as to cover indemnity for some other injury not covered thereby... . Travelers Ins. Co. v. Eviston (1941), 110 Ind. App. 143, 159-61, 37 N.E.2d 310, 316. A renowned textwriter states the following exception to the doctrine: [T]he issuance of a policy on an excepted risk would estop the insurer to object that the loss was an excepted one... . 16A Appleman on Insurance § 9090, p. 346 (1968). Similarly, in considering a fire insurance policy which prohibited certain articles from the insured building, our Court of Appeals quoted the following with approval: `Where such prohibited article is being kept and used on the insured premises at the time of the issuance of such policy and acceptance of the premium therefor, and the insurer knows such fact at that time, it waives the right to declare the policy void on account of such prohibited act.' Farmers' Conservative Mut. Ins. v. Neddo (1941), 111 Ind. App. 1, 40 N.E.2d 401; accord, Ins. Co. of Pa. v. IND. Reduction Co. (1917), 65 Ind. App. 330, 117 N.E. 273; Globe & Rutgers Fire Ins. Co. v. Ind. Reduction Co. (1916), 62 Ind. App. 528, 113 N.E. 425. And in considering a policy which was not to be effective until the insured returned to good health, the court held that the insurer waived that provision of the policy by accepting premiums with the knowledge that the insured was not in good health at the time of issuance. Pomerenke v. Nat. Life & Acc. Co. (1968), 143 Ind. App. 472, 241 N.E.2d 390. An insurance policy is a contract prepared by the insurers with its provisions standardized and formulated for the insurer's benefit and to comport with the insurer's premium rate and actuarial base. The terms of the policy are not generally open to negotiation and because of this the policies are known as `adhesion contracts.' Given the complexity of these policies, an insured relies heavily upon his agent and expects that the policy issued to him will conform to his stated desires. From this view the present situation is analogous to that in which an innocent misrepresentation by an agent as to the coverage of the policy precludes the insured from obtaining the desired insurance elsewhere if necessary. In that situation, as in the present, the insurer is estopped from claiming that the risk is excepted. There was evidence to support an estoppel as to the vacancy provision, and it was error on this issue for the trial court to grant judgment for Travelers notwithstanding the verdict.