Jasmine phones her agent to obtain auto insurance. The agent binds coverage over the phone, and tells her she will have a $250 collision deductible. When the insurer issues the policy, the underwriter imposes a $1,000 deductible because of Jasmine's poor driving record, then mails her the policy. She does not read it or notice this change until she has an accident six months later. She then demands that the insurer only require a $250 deductible rather than a $1,000 deductible, since she did not approve this change. Which legal principle of insurance contracts would be the insurer's most convincing reason for refusing to honor the $250 deductible?

Question

Quizplus · Accepted Answer

The parol evidence rule prohibits the introduction of extrinsic evidence to contradict or vary the terms of a written contract. In this case, the written policy issued by the insurer is the controlling document, and it states that the deductible is $1,000. Jasmine's agent's oral statement that the deductible would be $250 is not admissible to contradict the terms of the written policy.

Jasmine Phones Her Agent to Obtain Auto Insurance