Farm Bureau can't re-write insurance contract to reduce coverage from 300K to 20K
Tracie Couture's husband, while driving a motorcycle, was killed by a negligent driver. The at-fault driver was insured with Farm Bureau. Prior to the fatal collision, the at-fault's husband had asked his insurance agent to reduce the cost of their auto insurance coverage. The agent re-wrote the terms of the policy to eliminate or reduce several coverages, but by mistake Farm Bureau increased their liability coverage to $300,000.00. The insured, Rodney Daniels, paid the insurance bill--now reduced--without noticing that his liability coverage and premium had actually increased. After Couture's husband was killed, however, Farm Bureau attempted to reduce the coverage to $20,000.00, even though Daniels had paid for the greater coverage.
The Court held that there was nothing inappropriate about adjusting Daniels' coverage based on a mistake--even if it would substantially affect the rights of the injured victim--but refused to make the adjustment under the facts alleged. The Court noted that since Daniels did not induce Farm Bureau's mistake by fraud or misrepresentation, Farm Bureau could only re-write the policy if it proved a mutual mistake. The Court concluded that under the facts proven, the mistake in Farm Bureau's re-written liability coverage was a unilateral mistake made by Farm Bureau--which Daniels did not either induce or participate in--and therefore Farm Bureau was stuck with the coverage it had written (and been paid for).
As this case demonstrates, Farm Bureau has been one of the most aggressive Michigan insurers in attempting to derive advantage over its insureds through the unethical use of the courts and loopholes.