The Case of the Dutiful Son

Auto and umbrella insurance … with a twist

How the insurance company’s retained defense counsel tried to trap my client and deprive them of coverage.

A pedestrian is hit by the 76 year old woman. The pedestrian sustains serious injuries, loses months of work, has substantial medical bills, and some permanent residual impairment. As a result, it is a $1 million case.

The injured party sued my client – the woman's adult son – and his mother, the driver of the car.

Here is where it gets tricky: In retirement, the mother and father bought a home out of the country. They also had their own room in the married son’s house in California, and regularly stayed there for months at a time. Mom had a California drivers license and her own landline there.

The son's primary auto insurance policy was for $250,000, and there was an umbrella policy for $2M.

Is the accident covered?

The insurance company hired a lawyer to defend, but also wrote a five-page letter reciting certain policy provisions and “reservations.” My client and his wife, both relatively sophisticated business people, were concerned about the parents, and wondered what all the fine print meant.

In this case, the insurance company committed the $250K policy as a basis to defend, but disputed the umbrella.

The key issue was the mother's place of residence at time of accident. The insurance company's retained counsel tried to trap the insured. They presented a draft of answers to various "routine" questions for approval by the elderly mother. These routine questions would be signed under oath, though. For residence, only her out-of-country address was listed. These answers constitute binding admissions, just like testimony in a court of law. Listing the foreign address would have been devastating to the issue of residence. Fortunately, I was already on the job. I complained of bad faith and unethical conduct. We suggested that a more accurate answer would be “at the time of the accident, the mother lived at the son's California residence. “

With no admission of wrong-doing, the insurance company replaced the law firm. The company then resorted to "scorched earth" tactics in the coverage case, hiring another law firm to fight all the procedural battles it could find.


The insurance company could have settled for $950K, but instead fought the coverage case. Ultimately, it paid $2M to the claimant.

The parents, who worried about losing their house and becoming destitute in old age, finally got the peace of mind the dutiful son paid for when he purchased the umbrella policy.