Court says insurance company should have used social media to track down its insured

Cotto v. Universal Underwriters Ins. Co., 2012 WL 2093331 (Mass.App.Ct. June 12, 2012)

Failure to consult Myspace and Facebook kills defense in insurance coverage case.

Plaintiff sued defendant insurance company after the insurance company refused to pay a judgment against its insured — plaintiff’s former friend and driver of the car in an accident that injured plaintiff. The insurance company claimed that because its insured was uncooperative, it did not have to pay. The trial court agreed with the insurance company and threw the case out on summary judgment. Plaintiff sought review with the Appeals Court of Massachusetts. On appeal, the court reversed and remanded.

At issue was whether the insurance company had exercised due diligence in locating its insured. The court held that summary judgment was improper because the court was unable to conclude, as matter of law, that the insurance company carried its burden of proving that it exercised due diligence.

In evaluating the (lack of) efforts the insurance company had undertaken, the court observed that although there was evidence in the record that the insured had Myspace and Facebook accounts, there was nothing to indicate the insurance company or its investigators consulted these sites. Given the insureds “youth and transient lifestyle,” and the “importance of social media sites as centers of communication and sources of information,” the court found that a reasonable trier of fact could conclude that the insurance company could have done more to locate its insured.