A Real Example of an Auto Insurance Company Cutting Corners to Preserve Profits

Insurance companies will generally do everything they can to get out of paying a claim. Often, when a case ends up going to trial, insurance companies look for creative reasons to get out of paying.

A great example is a 2004 case from called the Georgia Court of Appeals called Jarrard V. Clarendon National Insurance Co. (267 Ga. App. 594).

What do agricultural products have to do with denying an insurance claim and could this happen to me?

In this case, a victim was in an accident with a tractor trailer carrying plywood. The truck belonged to a trucking company, Fairfield Trucking Company, and had liability insurance coverage through Clarendon National Insurance Company.

The driver of the car sued the trucking company and the truck driver for damages, and later added the insurance company as well, under an exception in Georgia law that allows insurance companies to be sued under what is known as “direct action.” Normally, insurance companies cannot be sued as part of a personal injury case, but Georgia trucking accidents are special and victims are allowed to sue the trucking insurance company.

The insurance company claimed that they could not be added to the lawsuit because they were exempt from being directly sued in this situation. They mentioned a law that says trucking insurance companies cannot be sued for vehicles that haul agricultural products. The trial court agreed with the insurance company that they should not be included in the lawsuit.

Is that right?

What the insurance company didn’t say when they brought up the exemption is that it only applies to vehicles that exclusively transport agricultural or dairy products. And it was the responsibility of the insurance company to prove that the vehicle exclusively transported agricultural or dairy products.

However, when Clarendon Insurance claimed the exemption, they only showed that the truck was transporting lumber on the day of the accident, not at every time leading up to the day of the accident.

So does the insurance company still win?

How much is my deductible?

Fortunately, the injured driver, James Jarrard, had good attorneys who were able to get the right result in the end. They appealed the case to the Court of Appeals of Georgia, which reversed the trial court’s decision, and ruled in Jarrard’s favor.

The Court of Appeals court said that the lower court made a mistake by allowing the insurance company to claim an exemption from the lawsuit without providing proof that they qualified for the exemption. The Appeals court ruled that just showing that a truck was hauling an exempt product on the day of the accident is not enough to show that it was exclusively used for that purpose.

In the end, justice prevailed. The Georgia Court of Appeals reversed the judgment of the lower court and did not allow the trucking insurance company to escape covering the claim.

If you believe you auto insurance company is cutting you short financially after an injury please contact our law firm immediately.