Allstate Insurance Company v. Diana Lynn Tarrant et al.

Summary

The Tennessee Supreme Court considered whether an insured ratified an insurance agent’s transfer of a vehicle from a commercial policy to a personal policy with lower liability limits. The Court held that ratification did not apply because the agent acted for the insurer rather than in the insured’s stead, and that the insurer was estopped from denying coverage under the commercial policy. The court affirmed the Court of Appeals’ judgment and remanded the cause.

Holdings

1. The insured did not ratify the transfer because ratification requires that the person whose act is being adopted have acted in the insured's stead and for the insured's benefit, and the insurance agency acted as the insurer's agent rather than as the insured's agent.
2. Allstate was estopped from denying coverage under the commercial policy because the van was transferred to the personal policy as a result of the mistake of Allstate's agent, despite the insured's receipt of notices and payment of premiums.

Questions Presented

1. Whether John Tarrant ratified the insurance agency's transfer of the van from the commercial policy to the personal policy by continuing to pay premiums after receiving notices and bills reflecting the transfer.
2. Whether Allstate was estopped from denying coverage under the commercial policy because its insurance agent mistakenly failed to follow the insured's instruction concerning coverage.

Disposition

affirmed