Notice Of Replacement Vehicles

Insurance attorneys need to read an August 2017, opinion from the 14th Court of Appeals.  It is styled, Tiffany Falkenhagen Thompson v. Geico Insurance Agency, Inc.

Texas Personal Automobile Policy’s require the policyholder to notify the insurer of the policyholder’s acquisition of a replacement vehicle for the coverage to extend to damage to the newly acquired vehicle.  This case is presented on cross motions for summary judgment regarding the notification requirement in the policy.  Tiffany says the policy provision does not apply to leased vehicles or alternatively, the policy language is ambiguous.  Geico says they were not timely notified of the replacement vehicle and thus, there is no coverage.  The trial court ruled in favor of Geico and this appeals court upholds that ruling.

Tiffany owned a 201  Infiniti G37 auto and secured insurance from Geico.  She traded in the G37 and leased a 2015 Infiniti Q50 auto.  A few months later while driving the Q50, Tiffany was involved in an accident.

The same day as the accident, Tiffany notified Geico of the loss and it was the first time Geico was aware of the new auto.  Geico denied the claim because they were not notified within thirty days of Tiffany having acquired a new vehicle as required by the policy and this lawsuit resulted.

Geico’s motion for summary judgment says the denial is justified based on Tiffany’s failure to notify them of the new auto.

Tiffany argued the policy covers the Q50 because the policy does not require her to notify Geico that she had acquired the leased vehicle and alternatively, the policy’s language is ambiguous and should be construed in her favor.

The parties direct the court’s attention to the following portions of the policy:
10.  Your covered auto means:
a. Any vehicle shown in the Declarations;
* * *
d. Any of the following types of vehicles on the date you became the owner or enter into a lease for a term of six months or more during the policy period[:]
1. A private passenger auto; . . . .
* * *
This provision 10.d applies only if you:
1. Acquire the vehicle during the policy period, and
2. Notify us within 30 days after you become the owner.
If the vehicle you acquire replaces the one shown in the Declarations, it will have the same coverage as the vehicle it replaced.  You must notify us of a replacement vehicle within 30 days only if you wish to add or continue Coverage for Damage to Your Auto.  Otherwise you have up to the end of the policy period to report the acquisition.
The Court then discussed the meaning of various words and upheld the trial court ruling in favor of Geico.