## Facts

- Evel Knievel and Snake River Canyon Enterprises obtained a Foremost Insurance Company policy for a large public event near the Snake River Canyon.
- The policy contained an exclusion for damage resulting from “riot, civil commotion or mob action.”
- Antonio Guanche operated a concession stand at the event and was told he needed insurance and could obtain it from Foremost.
- Guanche paid $300 to a Foremost agent, who told him he was “covered,” without explaining the type or scope of coverage.
- Foremost added Guanche as an insured to the existing policy, but no policy was delivered to Guanche.
- Before the event, spectators broke into concessionaires’ trailers; Guanche’s trailer was damaged and its contents were stolen.
- Guanche submitted a first-party claim for his property losses; related litigation included a declaratory judgment action to determine Foremost’s obligations.
- The district court treated the transaction as a patently ambiguous oral insurance contract and construed the ambiguity against Foremost, awarding Guanche first-party coverage.

## Issues

1. Whether Foremost’s agent’s assurance that Guanche was “covered,” combined with Foremost’s failure to deliver or explain a policy, created an ambiguous insurance contract regarding the scope of coverage.
2. Whether the policy’s riot/civil commotion exclusion barred Guanche’s recovery for theft-related property losses.
3. Whether Idaho’s rule construing ambiguous insurance agreements against the insurer applies to an oral, undocumented insurance transaction.

## Decision

- The Idaho Supreme Court affirmed the declaratory judgment requiring Foremost to provide first-party coverage to Guanche.
- The court agreed the oral arrangement was patently ambiguous as to the nature and extent of Guanche’s coverage.
- The court held the ambiguity was attributable to Foremost’s conduct (accepting premium and giving assurance of coverage without providing policy terms) and therefore must be resolved against Foremost.
- Guanche was entitled to coverage for damage to his trailer and theft of its contents.

## Legal Principles

- An oral insurance contract may be enforceable; when the insurer accepts a premium and assures coverage without providing terms, resulting uncertainty may render the agreement ambiguous.
- Ambiguities in insurance contracts, especially those created by the insurer’s acts or omissions, are construed against the insurer and in favor of coverage.
- Undisclosed limitations or exclusions in a policy not delivered to the insured cannot defeat coverage where the insurer’s contracting conduct leaves the insured without notice of coverage limits.

## Conclusion

Because Foremost accepted Guanche’s premium and assured him he was “covered” while failing to provide or explain the governing policy terms, the resulting ambiguity was construed against Foremost, requiring first-party coverage for Guanche’s theft-related property losses.


Foremost Ins. Co. v. Putzier, 102 Idaho 138, 627 P.2d 317 (Idaho 1981)