Jacobs

An insurance company voluntarily undertakes to defend an insured regarding an automobile accident that occurred after the insured allowed the policy to expire. What remedy does the insured have if the insurance company in defending fails to inform the insured about a proposed settlement offer?

Defendants Margaret Ann Jacobs and several family members (collectively referred to as Jacobs) appeal from a declaratory judgment in favor of plaintiff Farmers Insurance Exchange (Farmers). Farmers filed a complaint for declaratory relief, naming Jacobs and Patrick Vincent as defendants. Farmers sought a judicial declaration that no written policy of automobile liability insurance obligated it to provide defense or indemnification coverage to Vincent regarding an underlying wrongful death suit brought by Jacobs. Following a nonjury trial, the trial court found that the automobile insurance policy issued to Vincent had lapsed for nonpayment of premium. Therefore, the court held, no policy was in force on the date of the fatal accident involving Jacobs' decedent and Vincent, who, as the result of the accident, was convicted of vehicular manslaughter. The court ruled that Farmers…