Charles v. Canal Insurance

Oxner, Justice

(concurring in result).

I concur in the result reached in the leading opinion. I cannot escape the conclusion that this policy is reasonably calculated to mislead the ordinary person applying for insurance. The applicable measure of understanding is not that of one engaged in the insurance business or trained in the law but of a reasonably prudent person applying for an insurance policy.

The collision coverage provided on the face of the policy is clear and unambiguous. The limit of liability is fixed as “Actual Cash Value less $250.00 which deductible amount shall be applicable to each Collision or Upset.” Nowhere on this page is there any reference to any .endorsement, nor is there anything calling insured’s attention to any limitation or restriction on the amount of the coverage. If appellant wished to limit its liability to the sum of $2,000.00 less the deductible sum of $250.00, it could have so provided as it did in the case of the other coverages. Or the insurer could have easily eliminated all deceptive repugnancy by placing a stamp on this page calling attention to the limitations contained in the endorsement. This it did not do. The ordinary layman would have a right to assume that the plain and un*615mistakable language stated on the face of the policy represented the amount of his insurance against collision or upset.

The deceptive nature of the policy is further aggravated by the following on another page under “Conditions”:

“3. Limit of Liability: Settlement Options: No Abandonment : The limit of the company’s liability for loss shall not exceed either (1) the actual cash value of the automobile, or if the loss is of a part thereof the actual cash value of such part, at time of loss or (2) what it would then cost to repair or replace the automobile or such part thereof with other of like kind and quality, with deduction for depreciation, or (3) the applicable limit of liability stated in the declarations.”

A case closely akin on the facts is American Indemnity Co. v. Hood, 183 Ark. 266, 35 S. W. (2d) 353. There the insured bought an automobile giving to the seller a title retention contract or chattel mortgage for the unpaid portion of the purchase price, amounting to $448.20. Immediately after his purchase he obtained a policy of insurance. In the insuring clause on the face of the policy issued, the Company undertook to insure him against loss by fire of the automobile for three-fourths of its value, not to exceed $448-.20, with loss payable to both him and seller. The policy contained an endorsement stating that its intent was to protect only the interest of the mortgagee and that the liability of the insurer should be automatically reduced by the amount of each payment until the car was fully paid for, at which time insurer’s liability should cease. Later the automobile was destroyed by fire. At that time the mortgage indebtedness had been reduced to $112.05. The insurer contended that its liability under the endorsement was only $112.05. It was held that the insurer was liable for the full coverage stated on the face of the policy.

In further support of the view herein expressed, see Walker v. Commerical Casualty Insurance Co., 191 S. C. 187, 4 S. E. (2d) 248; Annotation 168, A. L. R. 555.

*616The explanation of the inconsistent provisions in this policy is stated by appellant’s counsel as follows: “In this case, the policy itself, which is a standard form, was originally drawn up as an automobile policy rather than a policy to cover long haul trucking equipment. By the use of endorsements it can be and is used to insure long haul trucking equipment.” But if the appellant wished to use a form not adapted to the character of insurance written, it should have taken proper precautions to see that it was not misleading.

It may be readily conceded that it is not practical to have a policy form covering every insurance need and that the use of endorsements is necessary in the insurance business. There is no reason, however, why this cannot be done in such a manner as not to render the policy deceptive.

Taylor, C. J., concurs.