Saad allows Farm Bureau to avoid payout again
Henry Saad was Governor Engler's hand-picked shill for the insurance industry. Farm Bureau is the Michigan insurer most eager to exploit litigation to avoid fiduciary responsibilities. They patted each other on the back again this week, when Saad's panel of the Court of Appeals denied life insurance to a widow.
David Schmid bought a 20-year term life insurance policy from Farm Bureau. The plain language of the policy said it "takes effect on the policy date," which was August 3, 2005. It also had a condition in the fine print suggesting that it would not be effective until the policy was delivered to the insured. After quoting the price and writing the policy, however, Farm Bureau decided that a surcharge was appropriate because Schmid had high cholesterol, and wanted to charge him an extra $155.00 premium. It delivered the policy to his agent, but the agent demanded the additional payment before delivering the policy to Schmid.
Schmids questioned the additional policy, and before the issue was resolved, Schmid died in a boating accident on August 21. The normal, established rule of Michigan jurisprudence is that any ambiguity in an insurance policy is interpreted against the company that drafted the policy and dictated the policy terms. Nevertheless, Saad's appellate panel ruled that Farm Bureau could enforce the conditional language in the policy requiring delivery to the insured, but that Schmid's widow could not enforce the black and white language that made the policy effective 18 days before Schmid's death.
If you are questioning whether to insure with Farm Bureau, keep this and other reported Michigan cases in mind. Farm Bureau will stoop at nothing to avoid paying its insureds the benefits it has contracted to pay.