GEICO policy upgrades

Nels Johnson called GEICO and saved a lot more than 15 percent on his car insurance.

Unfortunately for the Ozaukee County man, he didn't notice the savings were because his Mercedes convertible was only covered for damage it might sustain while in winter storage --- until he crashed months later and GEICO rejected his claims for some pretty big bills.

Johnson tried to argue that an agent's remark, "We can take care of that," amounted to a contract to add liablity and collision coverage for his sports car when he started driving it again in April, but the Court of Appeals on Wednesday found no basis for that conclusion.

According to the opinion:

In February 2012, Johnson called GEICO after notification from his prior insurer that his auto rates would be going up. He wanted to insure his 2003 Cadillac Escalade and his 2005 Mercedes Benz SL55 AMG convertible, which he said he only drove in the summer.  The agent said, "We can take of that."

But Johnson never called to specify upgrading the coverage, and later said he didn't understand the four declarations he got that showed only comprehensive coverage, and a bill of only $86.50, for the Mercedes, as meaning it only had comprehensive coverage. When Spring came, he put the Mercedes back on the road.

In October 2012, he was involved in a crash. The other driver suffered some injuries and Johnson's car sustained  significant damage.  He filed a claim with GEICO was surprised to learn he wasn't covered.  In January 2103, he sued Geico for breach of contract, negligence, reformation and bad faith.

But Circuit Judge Paul V. Malloy granted summary judgment to GEICO, finding the agent's statement, "We can take care of that," ambiguous, and hardly a clear promise to automatically upgrade coverage for the car in April.

"At most, the evidence shows that GEICO would be willing to accommodate Johnson," the Court of Appeals found.

Further, Malloy and the appeals court noted GEICO's several written notices to Johnson, prior to the crash, clearly showed the Mercedes had only comprehensive coverage, with dashes in the spots where the declarations showed various dollar amounts for the full coverage on the Escalade.

Johnson owns Dreamscape Transport, a trucking company in Saukville.

In short, the court found Johnson didn't show enough to suggest that a prior oral agreement, "a meeting of the minds," that should have been incorporated into the final policy, and so summary judgment for GEICO was appropriate because no reasonable jury could conclude there was an agreement to automatically increase the coverage.