What if the Policy You Requested Isn’t the Policy You Received?

Hopefully this does not happen to you, but on occasion the policy applied for is not the policy you receive from the insurance company. In such a case, you may need to reform the policy. Reformation is appropriate when the contract does not represent the true agreement of the parties.¹ It is an equitable remedy and within the trial court’s discretion whether to grant a motion for reformation.² It is an appropriate form of relief for a mutual mistake.³

Reformation of an insurance contract makes the policy express the true intent of the parties.⁴ An essential prerequisite is a prior agreement that represents the actual expectations of the parties.⁵ “A mistake cause by a scrivener’s error so that a written agreement does not correctly state the parties’ actual intentions and expectations may be remedied by reformation.”⁶

Here’s an example of how this could work: Let’s say you applied for a replacement cost value policy, sent in the paperwork to the insurance company and a policy was issue. However, when you suffered a loss and filed a claim for policy benefits you discovered that you had an actual cash value policy. You could ask the insurance company or the court to reform your ACV policy to an RCV policy since this is what you had intended to get in the first place. This is a watered down version of an example, but the point is to know there are many tools in your arsenal, and one of them is reformation.

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¹ Rocky Mountain Nat. Gas, LLC v. Co. Mountain Jr. Coll. Dist., WL 4459269 (Colo. App. Sept. 11, 2014) citing Md. Cas. Co. v. Buckeye Gas Prods. Co., 797 P.2d 11, 13 (Colo. 1990).
² Casey v. Co. Higher Educ. Ins. Benefits Alliance Trust, 310 P.3d 196, 206 (Colo. App. 2012). It is within the trial court’s discretion. Davis v. GuideOne Mut. Ins. Co., 297 P.3d 950 (Colo. App. 2012).
³ Buckeye Gas Prods., at 13.
⁴ Continental Western Ins. Co. v. Jim’s Hardwood Floor Co., Inc., 12 P.3d 824 (Colo. App. 2000).
⁵ Maryland Casualty Co. v. Buckeye Gas Products Co., 797 P.2d 11 (Colo. 1990).
⁶ Atchison v. City of Englewood, 568 P.2d 13, 17 (1977).