Court Opinion

ID: 9740439
Source: CourtListenerOpinion
Date Created: 2023-08-26 20:35:33.934141+00
Date Added: 2024-06-11T07:24:18.289189
License: Public Domain

Concurring Opinion.
Arterburn, C. J.
— An insurance contract is a detailed and complex instrument, drafted by expert legal counsel, standardized and presented in mass-produced form and delivered to the applicant for acceptance, normally without benefit of legal counsel on his part. It has been called a “contract of adhesion” for the reason that the insured is expected to “adhere” to it as it is, with little or no choice as to its terms. The Delivery of A Life-Insurance Policy, 33 Harvard Law Review, 198.
Coupled with this situation is the recognized fact that rarely, if ever, does an insured read his insurance contract, although the law has said, with reference to contracts generally, that a party is bound by what the instrument says, though ignorant of its terms. In fact, realistically, even if the insured had the inclination to attempt to read the policy, I doubt *340that he would gain much more knowledge than he previously had because of the technical language he would encounter. I doubt that most lawyers or even judges (who say one is presumed to have read his insurance policy) ever read them.
There is some analogy between the sale of goods and the sale of an insurance policy as a package. In the sale of goods there is an implied warranty that the article or package is fit for the purposes for which sold. An automobile is sold with the implied warranty that it will run, and it is no defense, if it does not run, to say that the buyer should have looked under the hood before buying and he then would have found there was no engine.
Although the law has not found a proper rationale for handling the problems arising from a failure to read all the detailed terms of an insurance contract, legal realism has attempted to ameliorate somewhat the harshness of the situation by construing such adhesion contracts against the party selling or delivering the same.
The question before us here is, should the payment of the premium on the policy be calculated from the date of the application (November 27, 1954) or from the date of delivery (December 10, 1954) of the policy? If the former date is used, the policy would have lapsed from. non-payment at the time of the death of the insured. This question requires a construction of the wording of the insurance contract.
The application for the insurance in this case stated that the insurance policy would not take effect until the first premium is paid “and the policy delivered.” The evidence shows that it was not delivered until December 10, 1954. However, the issued policy listed the “date of issue”-as November 27, 1954, the policy be*341ing predated as of the date of the application. The appellant admits, and it is the general rule, that if the insured had died between the date of the application (November 27, 1954) and the date of delivery of the policy (December 10, 1954), i.e., the “effective date”, there would have been no insurance coverage and, therefore, no liability on the part of the insurance company. 1 Couch, On Insurance 2d §11:2; Ebner, Admr. v. Ohio, etc., Ins. Co. (1918), 69 Ind. App. 32, 121 N. E. 315; Western & So. Life Ins. Co. v. Persinger, Admr. (1936), 101 Ind. App. 522, 199 N. E. 880.
A construction of the language of the policy which would compel the insured to pay for insurance during a period when he was not actually covered by insurance would be inequitable and contrary to reason. To me, regardless of what the policy may state, the “date of issue” is really the date of delivery. Lentin v. Continental Assurance Co. (1952), 412 Ill. 158, 105 N. E. 2d 735.
In Hampe v. Metropolitan Life Ins. Co. (1929), —Mo. App. — , 21 S. W. 2d 926, the court said:
“This ruling is founded upon the theory that where there is no liability, there can be no insurance; that the payment by the insured of a stipulated premium for a certain term entitles him to protection for the full term, and not for a less one; and that an insurance company should not be permitted, where the policy is legitimately susceptible of any other construction, to accept a premium for a definite term, and then escape liability by interposing the technical defense that the insured had agreed to pay the premium long before it was due.”
It is further pointed out that the applicant, when signing an insurance application, is normally asked by the insurance agent whether he desires to pay *342the premium then and have the insurance take effect Immediately or whether he desires to wait until the policy is delivered. The position taken by the appellant results in there being no difference. in the cost of the insurance, whether it is paid at the time the application is made or at the time the policy is delivered. Yet the applicant would not be insured in the intervening time between the making of the application and the delivery of the policy.
For the reasons stated, I feél the equitable and iair construction of the policy would be such that the insured should not have to pay for insurance during a period of time for which he receives no coverage and during which the insurance company bears no risk. See. Vance, The Law Of Insurance, pp. 287-288 (2d Ed. 1930). .
I therefore concur in affirming the .judgment of-the trial, court.