Court refuses to void insurance that mother paid in advance, after car is transferred to daughter
Sarah Jo Warfield's mother insured three vehicles and paid the annual premium in advance. Sarah was listed as the driver of one of the vehicles, a Chevy Cavalier, and later in the year, mom transferred the title to the Cavalier to Sarah. A month later, Sarah struck Kevin Morrison on his motorcycle, causing him very serious injuries. The insurer then argued that it did not owe coverage on the Cavalier because at the time of the injury, mom had no insurable interest in the car.
The Court of Appeals majority rejected the insurer's claim in Kevin Lee Morrison and Candice Sue Morrison v. Secura Insurance, finding that at the time the insurance was purchased, Sarah's mom did have an insurable interest in the car, and the risk to Secura never changed. On that basis, it refused to hold that the insurance contract should be voided on the date of transfer.