Court Opinion

ID: 9766581
Source: CourtListenerOpinion
Date Created: 2023-08-29 04:53:51.22878+00
Date Added: 2024-06-11T07:30:23.847544
License: Public Domain

Dissenting Opinion by
Hoffman, J.:
It is true that the Palmyra and Wissahickon Companies defaulted on their obligations because of insolvency, and not by choice. But that fact should not be controlling here. When an insurer fails to defend a claim or to satisfy a judgment against its insured, whether voluntarily or involuntarily, it “denies coverage” to him in the only meaningful sense of that term. It fails to accord him the protection he contracted for.
Two appellate courts have been called upon to construe language identical to that contained in the Keystone policies. Both have held that an effective “denial of coverage” results where insolvency prevents an insurer from paying claims against its policyholders. State Farm Mutual Automobile Ins. Co. v. Brower, 204 Va. 887, 134 S.E. 2d 277 (1964) ; North River Ins. Co. v. Gibson, 244 S.C. 393, 137 S.E. 2d 264 (1964). I believe that we should adopt a similar construction here.
I would reverse.