Court Opinion

ID: 9538972
Source: CourtListenerOpinion
Date Created: 2023-08-07 07:44:49.416755+00
Date Added: 2024-06-11T14:58:21.645505
License: Public Domain

CROCKETT, Justice
(concurring specially) .
I concur in the decision and in the holding that under the facts of this case the contract of insurance should be deemed to be in force. This is so because the stated position of the defendant company; that it could and did reject the insurance zvithout cause or reason therefor, is unsound.
However, I think the statement in the third to last sentence in the main opinion that
. . . the insurer cannot terminate the risk so assumed unless the insured is notified during his lifetime that his application was rej ected
is too all-inclusive a rule which could be applied under other circumstances to work injustice, and that such a policy could produce undesirable results in the insurance business. It may well have the effect of dissuading insurance companies from committing coverage at the time of receiving an application and the premium, depriving themselves of this favorable aspect of business, and the public of the advantages of such immediate coverage, which should be available in normal circumstances. Consequently, I think it should be stated in connection with this decision that there are reasons why it is desirable and beneficial, both to the insurance company and its customers that under ordinary circumstances it should be able to commit insurance as being in effect upon receiving the application and the premium, but with the understanding that the insurance is not effective if circumstances exist which justify its avoidance.
In order to accomplish the above-stated salutary objective, the insurance company should be able to reject insurance if in its investigation, or in the medical examination, it is found that there exists some sound reason, known to the applicant but not to the insurance company, why he was not insurable, and notice of rejection is promptly given, whether that happens to be in the lifetime of the insured or not. E. g., if the insured had a fatal disease, or some affliction which would make him un-insurable, and which fact was concealed from the insurance company, or where there has been any kind of fraud of deception practiced which would make the insurance contract void or voidable. On this subject generally see discussion and authorities cited in Prince v. Western Empire Life Ins. Co., footnote 1, main opinion; and also Green v. Equitable Life Assurance Society, 3 Utah 2d 375, 284 P.2d 695; Winger v. Gem State Mutual, etc., 22 Utah 2d 132, 449 P.2d 982; Burnham v. Bankers Life & Cas. Co., 24 Utah 2d 277, 470 P.2d 261.
This problem was dealt with and an important distinction pointed out in our recent case of Moore v. Prudential Ins. Co., 26 Utah 2d 430, 491 P.2d 227. The insured *212•died of a heart attack. The company sought to avoid liability on the ground that he had “catalepsy,” which he had failed to disclose in answers on the application. We plainly indicated that if the concealment had been of something causally related to his death, he would not have been covered, but inasmuch as the catalepsy was not related to the cause of death, the company had no sound reason for rejecting the insurance. In the instant case the insurance company did not state a basis for rejecting the insurance, material or otherwise, but took the position that it could disclaim coverage without giving any reason at all. As stated at the outset, I cannot agree with that position, and I therefore concur in the decision directing judgment for plaintiff.
ELLETT, J., concurs in the concurring opinion of CROCKETT, J.