Insurer Isn’t Tied to Slogan

On May 1, 2000, Christopher and Laura purchased a homeowner’s insurance policy from Allstate Insurance Co. for their residence. Five days later, their home suffered extensive fire damage.

The day after the fire, Christopher and Laura filed a claim with Allstate. According to Allstate, the cause of the fire is “unknown.” An arson investigator for the local sheriff’s office found no accidental cause for the fire. Neither did he find proof of arson.

Allstate was still investigating the fire’s cause when Christopher and Laura filed a lawsuit against Allstate for breach of duty of fair dealing and good faith, fraud and declaratory relief.

Christopher and Laura argued that Allstate’s insurance policy fraudulently stated, “You’re in good hands with Allstate.” But Allstate replied that the insured party failed to allege fraud with particularity, such as time and place of the alleged misrepresentation.

If you were the judge, would you rule Allstate fraudulently breached its advertising slogan, “You’re in good hands with Allstate,” by failing to pay this claim?

The judge said no.

To prove fraud, the judge began, the plaintiff must establish 1) a knowingly false representation by the defendant, 2) made with intent to deceive or induce reliance by the plaintiff, 3) justifiable reliance by the plaintiff, and 4) resulting damages.

As for advertising slogans, the judge continued, “Representations of opinion are ordinarily not actionable for fraud because they contain judgments of quality, value, authenticity or other matters of judgment.

“Sales talk and advertising slogans are examples of such nonactionable statements. They are loose general statements made by sellers in commending their wares and upon which no reasonable man would rely,” he emphasized.

Christopher and Laura have failed to prove the fire was accidental or due to a non-arson cause, the judge commented. Neither has Allstate proven the cause was arson, he noted.

Because Christopher and Laura failed to prove fraud by insurer Allstate and since the “You’re in good hands with Allstate” advertising slogan is just an opinion, this case is dismissed for failure to prove specific fraudulent acts, the judge ruled.

Based on the 2001 U.S. District Court decision in Smith vs. Allstate Insurance Co., 160 Fed.Supp.2d 1150.