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Ind. Supreme Court Issues Opinion Concerning Application for Fire Insurance

On December 2, 2015, the Indiana Supreme Court issued an opinion in Schmidt v. Indiana Insurance Company (pdf) concerning insurance coverage for a fire loss. The case involved a denial of a claim after a fire loss where it was discovered that the house had been unoccupied for quite some time but that fact was not disclosed on the insurance application. The insured alleged that he gave the agent accurate information but the insurance agent filled out the application inaccurately, and the insured didn’t remember signing the application. The Court found that judgment in favor of Indiana Insurance was appropriate because, had accurate information been provided on the application, no insurer would have issued a Dwelling Fire Policy based on that information.

[The parties designated evidence] showing that the plaintiff suffered no damage because, even if the insurance application had fully disclosed the accurate condition and usage of the property, no dwelling fire policy would have been issued providing fire coverage on property that was condemned, uninhabitable, without utilities, vacant for over a year, and undergoing renovation.

Similarly, the agent was not liable for the resulting non-payment on the dwelling policy because there is no way a dwelling policy could have been obtained on that particular property even if the agent hadn’t (allegedly) filled out the application with information other than what the insured provided.

However, judgment was not appropriate for the agent on the issue of negligent procurement of insurance. Based on the facts alleged by the plaintiff (which are the facts the court has to work with at the summary judgment stage), the agent could be liable for failing to assist the plaintiff in procuring some type of insurance against fire loss other than a dwelling policy (a Builder’s Risk policy, perhaps?) Accordingly, the case was remanded to the trial court for further consideration of that issue.

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