Opinion ID: 852499
Heading Depth: 3
Heading Rank: 2

Heading: Claims of Reliance on Representations

Text: The Filips contend that they relied on Block's representations regarding the adequacy of the policy's coverage. The Filips are correct that reasonable reliance upon an agent's representations can override an insured's duty to read the policy. Vill. Furniture, Inc. v. Assoc. Ins. Managers, Inc., 541 N.E.2d 306, 308 (Ind.Ct.App.1989). In general, this exception negates an insured's duty to read part of the policy if an agent insists that a particular hazard will be covered. Id. (If the agent insists to the prospective purchaser that the policy will insure against a hazard . . . that the prospect is particularly concerned about, and the hazard materializes, the company may be estopped to plead the terms of the policy because the strength of the agent's oral assurances lulled the prospect into not reading, or reading inattentively, dense and rebarbative policy language. (quoting Burns v. Rockford Life Ins. Co., 740 F.2d 542, 544 (7th Cir.1984))). The question, then, is whether there is any evidence that Block made representations to the Filips, which, if true, would have covered their loss and also tolled the running of the limitations period. The designated evidence reveals that the Filips told Block they wanted the same insurance as Bailey, the former owner of the property, and they received a substantially similar policy. The designated evidence also reveals that the Filips called Block several times between 1999 and 2003 to make changes in the coverage. These changes included increasing the coverage on the building from $250,000 to $350,000, adding Bailey as an additional insured, and changing the spelling of the Filips' names on the policy. The Filips, then, knew the policy well enough to make changes, but claim not to understand the commercial nature of the policy, the type of value coverage included, or the lack of business interruption coverage. Nothing in the designated evidence raises an issue of material fact, however, as to whether Block made representations regarding the inadequacy of the amount of business personal property coverage, whether the building coverage was replacement value or material value, or the lack of business interruption coverage. These shortcomings in their policy, which the Filips seek to attribute to Block's negligence, were readily ascertainable from the policy itself. Accordingly, as to these three alleged omissions, the statute of limitations began to run two years after the start of coverage, in 1999, and bars those three parts of the Filips' complaint, which was filed in 2003. The claim for lack of coverage of nonbusiness personal property is somewhat different. The designated evidence indicates that both the Filips and Block erroneously believed that the policy covered the Filips' nonbusiness personal property. Specifically, Valaria testified that Block told her that the Filips' property in the building would be covered. The Filips claim to have relied on Block's assertions regarding this coverage. Because we take the evidence most favorable to the Filips in opposing summary judgment, it was error to base summary judgment on the statute of limitations for the claim for lack of nonbusiness personal property coverage. If the trier of fact accepts the Filips' version, the statute may have first begun to run when the claim was denied. In sum, for the purposes of summary judgment, there is evidence that Block breached the duty of care because she incorrectly believed nonbusiness personal property was covered. There are no damages from this breach, however. Even if the Filips relied on Block's assurances that their nonbusiness personal property was covered, based on the information the Filips had, the only possible coverage was under the business personalty. The losses of business personal property exceeded the personal property policy limits by $17,000. If nonbusiness property had been covered, these limits, which were known to the Filips, would have prevented any recovery for its loss.