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Allstate's denial of insurance coverage after issuing wrong policy is upheld by Court of Appeals

Antonio Washington bought property in Detroit in 2008 and insured it with Allstate.  Allstate did not dispute that Washington requested a landlord or "rental dwelling" policy, which he paid for with his debit card.  When the policy arrived, however, under its technical terms, it was a "homeowner policy" rather than a rental policy.  In the fine print, the policy required Washington to live on the premises.  Washington testified that he read what he thought were the important policy terms, but did not detect the exclusionary non-rental terms that Allstate relies on.

About a year later, Washington secured a renter for the property, however, it was almost immediately damaged by arson.  When Allstate realized Washington was not living in the home at the time of the fire, it refused to cover the property loss it had insured.  Suit was filed and Washington argued that Allstate's evidence in favor of its defense should be limited by Allstate's failure to produce the tape recording of his telephone application for renter's insurance. The judge rejected this argument and Washington's entire claim and granted Allstate summary disposition.

Unfortunately for Washington, the appellate panel for his case included Judge Kirsten F. Kelly and another staunch Republican insurance-oriented judge.  These judges held that it did not matter that Allstate had sent Washington a policy different than he had sought or applied and paid for:  he was bound by the terms of the policy he got, whether he read it or not. 

Washington joined the argument that Allstate was "equitably estopped" from contesting his claim, because Allstate's agent agreed to provide a different (rental) policy, thus misleading Washington about the content of the policy.  The Court held, incredibly, that Allstate's agent owed "no duty to speak,"  and therefore the agent wasn't guilty of negligently inducing Washington to believe that he had bought something other than what he did.

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