Insurance–Motor Vehicles–“Newly Acquired Automobile” Clause Extended to Cover Previously Owned Inoperable Vehicles–National Indem. Co. v. Giampapa

Plaintiff insurance company brought an action for a declaratory judgment that it be held not liable on a policy it had issued to the insured motorist. A party injured in an accident involving the insured had obtained a judgment against the insured in a suit which the insurer defended with a reservation of rights. Although a 1949 Cadillac was the “Described Automobile” in the insurance policy, the insured was driving a 1956 Ford at the time of the accident. The trial court found that during the term of the policy the Cadillac had become inoperable and was replaced by the Ford which the insured had owned before the insurance policy was issued. Although the Ford had not previously been operable, it was put in working order when the Cadillac could no longer be used. The insured contended that when the 1956 Ford replaced the Cadillac, it became automatically covered under the policy’s “Newly Acquired Automobile” clause, since the insurance policy specifically stated that notice of a substitution need not be given to the insurer. The action of the insurance company was dismissed. On appeal to the Supreme Court of Washington, held, affirmed, three judges dissenting. The 1956 Ford was covered by the “Newly Acquired Automobile” clause and the insurance company was liable on the policy.