Gallant Ins. Co. v. Isaac

Christina Isaac (defendant) bought car insurance from Gallant Insurance Company (Gallant) (plaintiff) through an insurance agent, Thompson-Harris. Isaac’s coverage was set to expire on December 2, 1994. On that date, Isaac traded for a new car and contacted Thompson-Harris about purchasing the full-coverage insurance required by her loan provider. Thompson-Harris indicated that the new coverage would immediately “bind” and that Isaac could come in on Monday, December 5 to make payment. Generally, Gallant’s coverage became binding on a new policy when Thompson-Harris faxed or called in the necessary documents. Thompson-Harris had a “common practice” of orally telling clients that they had coverage before payment was made, though this technically violated Gallant’s policy. The original policy provided that the agent was not authorized to “waive or change any part of the policy” without approval from Gallant. Thompson-Harris faxed in the policy change form on December 3, adding Isaac’s new car and increasing the coverage. The form also included a notation that Isaac would make payment on Monday. On December 4, Isaac was in a car accident. The next day, Isaac paid the new insurance premiums and reported the accident. Thompson-Harris then filled out the official form notifying police that Isaac had coverage when the accident occurred. Gallant issued the new policy, which stated that coverage took effect on December 6. Gallant sued Isaac and Loretta Davis, who was also involved in the accident, seeking a declaratory judgment that the policy was not effective at the time of the accident and that it was not liable. Summary judgment was granted for the defendants, and Gallant appealed to the Indiana Court of Appeals.