In Suter v. Virgil R. Lee & Son, Inc., 51 Wn. App. 524, 754 P.2d 155 (Wash. App.), cert. denied, 111 Wn.2d 1005 (1988), the Suters (husband, wife, and daughter) appealed from a summary judgment order dismissing their negligence suit against their insurance agency, the "Lee Agency," in which they alleged that it failed to recommend increased liability coverage.
In 1973, the Suters purchased automobile liability insurance through the Mitchell Insurance Agency ("Mitchell Agency"), with policy limits of $ 25,000 per person and $ 50,000 per accident. In 1977, the Mitchell Agency was purchased by the Lee Agency, but the family's existing insurance was left unchanged.
Moreover, the plaintiffs never contacted the Lee Agency regarding the adequacy of their automobile liability insurance policy, and merely renewed the policy with the same insurer. One year later, in 1978, when a member of the Suter family was at fault in a fatal automobile accident, the Suters realized that their liability insurance was inadequate.
They blamed the Lee Agency, alleging that it held itself out as an insurance specialist and had an obligation to recommend adequate insurance coverage. The family's insurance expert opined that "an insurance agent selling automobile liability insurance should inquire into an insured's assets, income, occupation, and real estate holdings, and should recommend liability coverage for the insured adequate to protect the insured's assets." 754 P.2d at 156.
Moreover, the plaintiffs' expert maintained that, given the Suters' financial status, the Lee Agency "failed to act prudently" by not recommending a liability policy of at least $ 300,000. Id.
The trial court disagreed, and awarded summary judgment to the defendant.
On appeal, the court framed the issue as follows: "Did the Lee Agency, after acquiring the Mitchell Agency, have a duty to contact the Suters and recommend that they purchase an automobile liability policy with greater limits than that in effect at the time of the accident?" Id.
The court held that, given the lack of a special relationship, the Lee Agency "owed no duty to the Suters to recommend a certain level of automobile insurance coverage." 754 P.2d at 155.
The court reasoned:
We find ourselves in accord with the view...that "the general duty of reasonable care which an insurance agent owes his client does not include the obligation to procure a policy affording the client complete liability protection." That decision was justified on the basis that ordinarily the insured knows the extent of his personal assets and his ability to pay better than the insurance agency. Thus, it is the insured's responsibility to advise the agent of the insurance that he wants, including the limits of the policy to be issued. 754 P.2d at 157.