The statutory presumption created by Tenn. Code Ann. § 56-7-135(b) that payment of an insurance premium “creates a rebuttable presumption that the coverage provided has been accepted by all insureds under the contract” applies in claims against insurance agents for negligent failure to procure an insurance policy.
In Parveen v. ACG South Insurance Agency, LLC, 613 S.W.3d 113 (Tenn. Dec. 4, 2020), plaintiffs lived in Georgia and had an umbrella insurance policy that included $2,000,000 in excess uninsured motorist coverage. When plaintiffs moved to Tennessee, they worked with defendant agent to obtain new insurance, and they alleged that they provided him with a copy of their old policy and asked for the exact same coverage. Defendant agent obtained an umbrella policy for plaintiffs, but the policy did not include any excess uninsured motorist coverage. There was no “separate line item” for uninsured motorist coverage on the quote given to plaintiffs, the policy premium did not “reflect the inclusion of such coverage,” and the declarations page did not include uninsured motorist coverage. Further, the policy itself specifically excluded uninsured or underinsured motorist coverage.
Plaintiffs initially paid for the policy obtained by defendant in 2013, and they renewed the policy in 2014 and 2015. In 2015, plaintiff wife was involved in an accident with an underinsured motorist. After this accident, plaintiffs added uninsured motorist coverage to their policy, but because such addition was not retroactive, the insurance company was found not liable for damages from the accident.