Coverage Did Not Begin on Effective Date, Instead, it Started Weeks Later

 

Nov 5, 2018

The United States Court of Appeals for the Eleventh Circuit has affirmed the lower courts decision by ruling that coverage under an insurance policy began two weeks after the “policy effective date”, which happened to be two weeks after the insured was injured in a car accident. The case is Atl. Specialty Ins. Co. v. Pastukov, No. 18-11129,2018 U.S. App. (11th Cir. Oct 10, 2018).

 

The insured, Sergey Pastukov, was involved in a truck accident on May 14, 2015. On May 29th a certificate of insurance (COI) was issued to Pastukov. The first page of the COI had spaces to fill in. Two of the spaces were labeled “Coverage Effective” and “Transaction Effective Date”. Both spaces were filled in with the date May 14, 2015 which was also the date Pastukov was injured in the accident. The first page also shows that the COI was not processed until May 29, 2015.

 

Atlantic Specialty Insurance Company (Atlantic), denied the coverage and later sought a declaratory judgment to establish the fact that it was not obligated to cover the accident.

 

Atlantic provided three reasons why it should not be obligated to cover Pastukov's accident. The argument at issue here is Atlantic's argument that there is no coverage because the loss occurred prior to the beginning of coverage.

 

In the policy there was a provision entitled “Your Coverage Effective Date” which provided that Pastukov's coverage under the policy began on the latest of: 1. The policy effective date; 2. The date You become a member of an eligible Class as described above; or 3. The date upon which the program administrator or its designee approves your fully completed and signed enrollment form.

 

The 11th Circuit court affirmed and explained that the policy's effective date was May 14th, however his coverage did not begin until the Program Administrator approved the application on May 29th.

 

Editor's Note:

The Atlantic policy contained clear terms that depicted three events that determined the start date of the coverage. The language said whatever event occurred latest is the one that would govern the start date of the policy. In this case, although the initial start date was May 14th, the latest date was May 29th, so that is the date when coverage begins.