INSURANCE-RELATED COURT CASES
Digested from case reports published online
COURT DECISIONS
Separate endorsements for
separate vehicles
Kepali Group owned multiple vehicles. The company used Brown & Brown to handle its automobile insurance needs, which arranged for a commercial auto policy that listed the company’s vehicles. The policy, issued by Prime Property and Casualty Company (Prime), included a Premium Audit provision.
Note: The term refers to a detailed examination of a policyholder’s operations, records, and accounts to determine the actual exposure units (e.g., number of vehicles) and premium for insurance coverages already provided.
On December 6, 2019, there was a collision caused by Yordani Rodriguez, who was driving a vehicle owned by Kepali. The driver and passenger of the other vehicle sued for injuries.
Prime filed for summary judgment, alleging that it did not owe a duty to defend or respond to the accident. After the court ruled that a defense duty did exist, Prime appealed.
The insurer argued that the Toyota involved in the collision was not covered. It was not added because an endorsement billing to put the vehicle on the policy was not paid. Both parties admit that the vehicle involved in the loss had been reported in time to meet the policy’s “Owned Autos You Acquired After the Policy Begins” provision. Confusion arose from the details surrounding the request to add the Toyota.
It was part of a multiple vehicle issue. Kepali’s agent, on their behalf, submitted a request to add two Mercedes as new vehicles and to change the vehicle position on a second Toyota that was already scheduled as covered property. The Toyota involved in the accident was originally asked to be added to a different commercial auto policy written with a different carrier (but also secured via Kepali’s agent).
Instead, the next day, a separate endorsement request was sent to add the newly acquired Toyota to the Prime policy. Again, that request complied with the time required by the other acquired car provision.
Kepali paid the additional premium required for Prime to add the two Mercedes and change the reference to the previously listed Toyota on the schedule. When the agent received a separate additional premium request to add the newly acquired Toyota, he sent an email to Prime, who already saw an endorsement with a change involving a Toyota. Prime never responded to clarify that the two endorsement billings involved two distinct vehicles.
Confusion continued among the parties. As there was no reply to the agent’s latest email, Prime did not add the newly acquired Toyota for nonpayment of the endorsement. On the other hand, the agent and Kepali assumed that coverage had been handled and the agent even created insurance certificates for the vehicle (though without Prime’s consent).
The higher court’s effort was focused on the language of the policy’s “other acquired car” and premium audit provisions, and the endorsement activity along with the applicable nonpayment laws. It reasoned that Kepali gave timely notice to Prime regarding the car’s acquisition and requested coverage. It noted that the acquired car provision made no reference regarding when any additional premium was due.
The policy was subject to audit and adjustment as of the end of the policy term, so Prime had the mechanism to collect additional premium on that auto. Prime’s decision to cancel coverage for the car failed to comply with notification requirements. In light of these circumstances, the lower court decision finding a duty to defend was affirmed.
Prime Property and Casualty Insurance Company v. Kepali Group, Inc., et al.—US Court of Appeals, Eleventh Circuit—No. 23-12518—May 2, 2025.
