Allstate Insurance improperly refused to honor homeowner's claim in Staples v Allstate

Posted Friday, January 25, 2013 by Ed Harper

This week, in an opinion authored by Hon. Charlie Wiggins, the Washington Supreme Court, No. 86413-6, determined in an 8-1 vote, Allstate Ins. Co. failed to provide sufficient proof they were prejudiced and was remanded back to the trial court level.

Here, Mr. Staples had alleged lost >$15,000 in tools stemming from an auto theft of a van he owned. He brought a claim under his homeowner’s policy for lost tools against Allstate. Allstate denied the claim because they alleged he failed to cooperate by not submitting to an examination under oath (EUO). The trial court granted summary judgment to Allstate because they alleged the insured (Staples) breached his duty he owed to Allstate to cooperate. The Supreme Court reversed the trial court’s decision holding that Allstate failed to prove they were prejudiced by the insured’s actions in not agreeing to provide the EUO or other documentation.

More specifically, John Staples submitted an auto theft claim to Allstate under his homeowner’s policy he had with Allstate. (He also submitted a claim under his auto policy for the loss of his vehicle.) Allstate would not schedule an EUO without Mr. Staples first providing statements of the items he lost and his tax returns for the prior 3 years. Mr. Staples apparently did provide oral statements 2 different times, and he did provide documents proving certain elements that were stolen. However, the financial records were not provided to Allstate.

The Supreme Court stated Allstate had not provided the requisite proof to the trial court to establish how they were prejudiced by Mr. Staples not providing all the items requested. Further, of significant import, the Allstate policy had a two-part test regarding their duty to provide the insured with coverage if the following occurred:
1) insured must cooperate; and 2) if not cooperative, the insurer was prejudiced.

This is a significant holding by the Washington Supreme Court to overturn the trial court, and requiring Allstate to prove they were prejudiced by their insured not agreeing to an EUO.

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