Insurance Coverage: District Court finds an insurer’s duty of care to explain coverage to insured where the insurer employs a licensed insurance agent, but denies the existence of any fiduciary relationship between insurer and insured

The plaintiff, Jeffrey Perry, brought suit against the defendant, his insurer, for alleged negligence and breach of fiduciary duty arising out of the advice he received from an insurance agent employed by the insurer regarding the plaintiff’s insurance needs. The plaintiff alleged that he contacted his insurer to consult with an agent about his coverage, and during the conversation, the agent assured him that she properly advised him. Relying on this information, the plaintiff alleged that he then purchased automobile coverage to fit the plaintiff’s needs. Despite the help from the agent, the plaintiff claimed that the insurance policies sold and recommended to him were inadequate because they provided limited uninsured/underinsured motorist coverage given his personal circumstances. Furthermore, the plaintiff claimed that the agent failed to explain, identify, offer or recommend adequate umbrella/excess insurance coverage that would provide additional uninsured/underinsured motorist coverage. The plaintiff was in a car accident with an underinsured motorist and suffered serious injuries. He alleged that all available insurance, including uninsured/underinsured coverage, had been exhausted and was inadequate to compensate the plaintiff for his injuries. In the defendant’s motion to dismiss, the insurer argued that the plaintiff’s claim for negligence fails because the defendant did not owe, and therefore could not breach, a duty to the plaintiff to advise him as to the adequacy of his insurance coverage. The District Court disagrees, finding that the insurer through its licensed agent owed the plaintiff a duty to explain his insurance coverage to him, recommend the proper amount given his individual circumstances, and to offer that amount. Therefore, the motion to dismiss is denied as to the negligence claim. As to the alleged breach of fiduciary duty, the defendant argued that the plaintiff is unable to establish that he had a fiduciary relationship with the insurer because Connecticut law treats the insurer/insured relationship as contractual and none of the plaintiff’s allegations transform that contractual relationship into a fiduciary one. The District Court agreed with the defendant and explained that “not all business relationships implicate the duty of a fiduciary” and “a mere contractual relationship does not create a fiduciary or confidential relationship.” The Court cites cases in which it had been held as a matter of law that the relationship between an insurer and an insured is commercial in nature. The plaintiff cites no authority suggesting the relationship “was anything more than a commercial transaction” or made no “[allegations] of a unique degree of trust and confidence between the plaintiff and the defendant akin to a fiduciary or special relationship.” Therefore, the plaintiff did not produce enough evidence to transform the commercial relationship into a fiduciary one and the motion to dismiss is granted as to the breach of fiduciary duty claim. Perry v. Gov’t Emps. Ins. Co., No. 3:22-CV-910 (KAD), 2023 WL 2456707 (D. Conn. Mar. 10, 2023).