A federal judge granted summary judgment to a Louisiana insurance agent who had been sued for allegedly negligently failing to procure flood coverage. The policyholder, Maurice Olivier, sued last year after his personal property was destroyed by Katrina flood waters in 2005. The judge, however, said the claim was barred by Louisiana’s one-year statute of limitations for acts or omissions of insurance agents in tort or contract. Olivier obtained the policy in March 2003, and should have discovered any problem with the insurance immediately, the judge said, meaning the suit was filed two years too late. With the claim against the agent dismissed, there was no possibility State Farm could be vicariously liable for his conduct, and the judge dismissed the case against State Farm as well. Here’s a pdf of the 6-page summary judgment opinion.
This case bears some similarities to cases we have seen in Mississippi, but there are some key differences. The policy Olivier purchased was renter’s insurance, but it functioned like homeowners insurance: it covered Olivier’s personal property for wind damage but not flood. Because he was renting the townhouse he was living in, however, he didn’t need to worry about insuring the structure. In addition, there apparently was no wind damage, just flood damage, and so Olivier couldn’t sue on the policy (some would say that hasn’t stopped others). He was left with a potential claim for the agent’s supposed negligent failure to sell him flood insurance, and against State Farm for vicarious liability for the agent’s alleged omissions.
Even if the claims hadn’t been defeated by the statute of limitations, I wouldn’t have given them much chance. This pdf of the summary judgment brief by the agent and State Farm says that Olivier was offered flood insurance but turned it down, saying he couldn’t afford the flood insurance and that if a flood came he could move his stuff to the second story. Even if that isn’t true, an agent has no duty to make you buy the optimal coverage it turned out in hindsight you needed — instead, you as the consumer have an obligation to figure out what you need and say it, and the agent then has a duty to provide you with what you asked for, or if that is not possible, to tell you what alternative coverages may be available.