Court Opinion

ID: 9771332
Source: CourtListenerOpinion
Date Created: 2023-08-29 16:39:21.042677+00
Date Added: 2024-06-11T07:31:28.637408
License: Public Domain

MAUS, Judge,
dissenting.
I respectfully dissent. In doing so I acknowledge that, as stated in the majority opinion, the weight of authority is
‘that under an automatic insurance clause requiring an insured to give notice to an insurer within a specified time following his acquisition of ownership or acceptance of delivery of a replacement or additional vehicle, such newly acquired vehicle is automatically covered for liability arising from the operation thereof during such notice period’ without notice or the payment of an additional premium.
However, I do not find that authority logically persuasive or controlling in respect to the terms of the policy and facts involved in this case.
The pertinent language of the policy involved in many of the cases underlying the above line of authority was that the insurance applied to a newly acquired automobile, if the company insured all automobiles owned by the insured, provided the insured gave notice of the acquisition within a specified number of days. See Ash-Grove L. & P. Cement Co. v. Southern Surety Co., 225 Mo.App. 712, 39 S.W.2d 434 (1931); Annot., Automobile Insurance — Substituted Cars, 34 A.L.R.2d 936 (1954). Other policies extended coverage to newly acquired automobiles by including them in the definition of the insured or owned automobile, if such notice was given. American Standard Insurance Co. of Wis. v. Rider, 475 S.W.2d 418 (Mo.App. 1971); Consumers United Ins. Co. v. Johnson, 26 Wash.App. 795, 614 P.2d 657 (1980). Many cases merely referred to automatic coverage if notice is given within 30 days. See Central National Ins. Co. v. LeMars Mutual Ins. Co. of Iowa, 294 F.Supp. 1396 (S.D.Iowa 1968); Georgia Mut. Ins. Co. v. Criterion Ins. Co., 131 Ga.App. 339, 206 S.E.2d 88 (1974). The language referred to above requires no action on behalf of the insured except to give notice. The policy declares the insurance afforded thereby is extended to an additional vehicle upon its acquisition. No penalty is prescribed in the event the insured fails to give the required notice. Therefore, it could, with some degree of logic, be said the notice was a condition subsequent to the extension of the insurance beyond the notice period. See Ash-Grove L. & P. Cement Co. v. Southern Surety Co., supra.
However, that construction is not mandatory. See Lowe v. State Farm Mut. Auto. Ins. Co., 420 So.2d 318 (Fla.Dist.Ct.App. 1982). There is no legal prohibition against a policy provision which makes the initial extension of a policy conditioned upon some subsequent act of the insured. “The Garrote policy is clear on its face, however. For an after-acquired vehicle to be covered by the insurance policy, the insured must notify the insurer within 30 days of the vehicle’s acquisition. This Garrote failed to do. The District Court did not err in denying coverage.” Garrote v. Liberty Mutual Insurance Company, 496 F.2d 1168, 1170 (5th Cir.1974). See Security Ins. Co. of Hartford v. Daniels, 70 Mich. App. 100, 245 N.W.2d 418 (1976).
The language of the clause in question is significantly different from the language *651referred to above. That difference is contained in the following extract.
The insurance afforded ... applies to any other automobile of which the named insured ... acquires ownership if it ... is an additional automobile ...; provided that the named insured ... notifies the Company ... within 30 days after the date of such acquisition of his election to make the insurance afforded by this and no other policy affording similar insurance issued by the Company applicable to such automobile, (emphasis added)
By the plain terms of this clause the insurance afforded by the policy is not automatically extended to a newly acquired automobile. It is so extended only upon the condition the insured elects to make it applicable. It is not forced upon him. The term “election” requires an affirmative choice by the insured. This language has often been contained in policies involved in cases in which it has been considered or not regarded as controlling. The general rule has been restated and applied. See Worsham v. Walker, 498 So.2d 260 (La.App. 1 Cir. 1986).
However, the significance of the requirement of an election has been recognized. In State Farm Mutual Automobile Insurance Co. v. Gigon, 437 F.2d 1329 (5th Cir. 1971), tort plaintiffs contended two existing policies should be “stacked” and made applicable to a newly acquired automobile. The policy provided that if more than one policy could be applicable to such automobile, the insured should elect which would apply. In denying the tort plaintiffs’ contention the court said, “When the Lincolns acquired the second Dodge automobile State Farm’s policy plainly required them as the named insured to make an election since, at that time, they held two policies which could afford coverage.” Id., at 1331. In Beck v. Aetna Casualty and Surety Company, 38 Colo.App. 77, 553 P.2d 397 (1976), the court held an existing policy was not applicable because the insured obtained a second insurance policy specifically applicable to a newly acquired automobile. In so holding the court said, “The insureds, having elected to obtain specific coverage on the Chevelle, lost their right to elect coverage under the larger policy.” Id. 553 P.2d at 399.
The requirements of an election by the insured are also emphasized by the following provision of that clause: “The named insured shall pay any additional premium required because of the application of the insurance to any newly acquired automobile.” This provision makes it clear the “premium required because of the application of the insurance to any newly acquired automobile” is for a period commencing on the date of acquisition of the newly acquired automobile. That is the date of the application of the insurance. It is unrealistic to hold that the insurance applicable to a Yugo would also be applicable to one or more newly acquired Jaguars, even for 30 days, without an appropriate additional premium. Contra Worsham v. Walker, supra. The insured should be given the option to determine which, if any, insurance is to be applicable and whether or not he is to be liable for an additional premium. See Miller v. New Amsterdam Casualty Company, 245 N.C. 526, 96 S.E.2d 860 (1957). I believe that it should be held that if an election is made, the insurance is applicable from the date of acquisition. But, if that election is not made, the insurance is not applicable.
“A policy of insurance must be construed as a whole and every clause must be given some meaning if it is reasonably possible to do so.” Brugioni v. Maryland Casualty Company, 382 S.W.2d 707, 712 (Mo.1964). To construe the policy to extend the insurance for 30 days without any action by the insured is to give no meaning to the phrase “requiring an election.”