Connecticut General Statutes

Conn. Gen. Stat. § 38a-321 (2026)

(Formerly Sec. 38-175). Liability of insurer under liability policy

✓ current as of May 2026

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Each insurance company which issues a policy to any person, firm or corporation, insuring against loss or damage on account of the bodily injury or death by accident of any person, or damage to the property of any person, for which loss or damage such person, firm or corporation is legally responsible, shall, whenever a loss occurs under such policy, become absolutely liable, and the payment of such loss shall not depend upon the satisfaction by the assured of a final judgment against him for loss, damage or death occasioned by such casualty. No such contract of insurance shall be cancelled or annulled by any agreement between the insurance company and the assured after the assured has become responsible for such loss or damage, and any such cancellation or annulment shall be void. Upon the recovery of a final judgment against any person, firm or corporation by any person, including administrators or executors, for loss or damage on account of bodily injury or death or damage to property, if the defendant in such action was insured against such loss or damage at the time when the right of action arose and if such judgment is not satisfied within thirty days after the date when it was rendered, such judgment creditor shall be subrogated to all the rights of the defendant and shall have a right of action against the insurer to the same extent that the defendant in such action could have enforced his claim against such insurer had such defendant paid such judgment.

(1949 Rev., S. 6191.)

History: Sec. 38-175 transferred to Sec. 38a-321 in 1991.

Annotations to former section 38-175:

Applies only to contracts made after statute took effect; constitutionality discussed; effect of payment by liability insurance company after judgment on obligation of surety on bond releasing attachment. 97 C. 16. Under former law, where policy indemnified against loss and not liability, insurer need not pay unless assured actually paid over money; bankruptcy of assured before satisfaction of judgment; effect of present statute. 98 C. 452; 119 C. 416. Gives no greater rights except for cancellation and annulment than assured had. 107 C. 651. Breach of covenant by assured is a defense; facts held not to amount to breach by assured of covenant to render insurer “all cooperation and assistance in his power”. Id., 654. Pleading and burden of proof. 108 C. 566. Provision in policy that there should be no coverage if car is driven in violation of law as to age of driver construed; facts held to show violation of provision. Id., 599. Cited. 111 C. 550. Judgment creditor cannot recover from insurer if assured, because of breach of condition of policy, could not. 114 C. 313. Rights of injured persons recovering judgments are to be determined as creditors, not lienors; in interpleader where policy amount inadequate, equity will distribute pro rata. 115 C. 193. Waiver or estoppel may arise where insurer undertakes or continues defense of action with knowledge of breach by assured of cooperation clause. 117 C. 89. Settlement of multiple claims; insurer liable for fraud or bad faith in failing or refusing to settle claims within policy limit. Id., 147. “Absolutely liable” means only that payment is not dependent upon satisfaction by plaintiff of a judgment; claimant has only inchoate right against insurer until judgment. Id., 153. Judgment in original action that person was driving car is not res judicata that he was an assured in action by judgment creditor against insurer; where insurer pleads breach of policy, burden is on one suing on it to prove performance. 118 C. 194. To avoid policy, breach must be substantial and material. Id., 198. Settlement with assured made in good faith in accordance with policy discharges insurer's obligation; creditor thereafter obtaining judgment has no claim against insurer. Cited. 121 C. 514; 122 C. 196; 125 C. 509; 126 C. 87; 127 C. 258; 141 C. 574; 142 C. 251. The owner of a tort judgment has a right of recovery from the insurer of the judgment debtor if plaintiff has recovered a final judgment; the judgment is against a person who is insured by defendant against liability on it, and the judgment remains unsatisfied. Id., 388. Cited. 145 C. 74. Automobile liability policy covered any person using automobile with permission of insured, held “use” not limited to operation of vehicle. 147 C. 713. Phrase “person responsible for the operation of the motor vehicle with the express or implied consent of the insured” construed. 148 C. 15. If express language releasing the debtor is lacking, a person secondarily liable has the defense of accord and satisfaction if actual performance of the composition agreement has been completed as to a given signatory creditor. Id., 115. Cited. 150 C. 211. Insurer is not deprived of any defense it may have under policy, in absence of collusion, against judgment creditor of insured. 152 C. 31. Injunctive relief against insurer to compel payment of judgment against insured ordinarily denied on grounds of adequate remedy at law under statute. Id., 249. Where, in declaratory judgment action to determine insurance company's obligation to defend and pay judgment, another adequate remedy exists, demurrer will be sustained. 153 C. 349, 350. Declaratory judgment may be made by trial court on matters which are litigable under section and becomes res judicata in subsequent action. 158 C. 251. Cited. 161 C. 388; 163 C. 131, 552; 176 C. 676; 178 C. 32. The words “property” and “casualty” as used in section discussed. 187 C. 363. Cited. 199 C. 245; 206 C. 668; 213 C. 696; 220 C. 285.

Cited. 2 CA 282; 10 CA 125; Id., 135.

Statute does not impose absolute liability. 1 CS 81. Cited. 3 CS 364. Injured party becomes subrogated to the rights of the assured against the insurer, without extending such rights in any way, except by prohibiting any termination of the coverage by separate agreement. 5 CS 306. Whether policy classified is one against “loss” or “liability” is resolved by statute; contract beneficiary need not allege insolvency of insured to prove it. 6 CS 468. An insolvent tortfeasor may not by his breach of contract of insurance bar the action granted to an injured person against an insurer where the breach of contract does not prejudice the insurer. 8 CS 469. Cited. 19 CS 396; 20 CS 455. A judgment creditor may be subrogated to the insured's rights. 32 CS 52. When default judgment against car driver, allegedly driving with permission of insured, was unsatisfied within 30 days, insurer cited as codefendant pursuant to omnibus clause of policy. 33 CS 523. Cited. 39 CS 85.

Motorcycle held not an “automobile” within meaning of exclusion clause of policy. 2 Conn. Cir. Ct. 164.

Annotations to present section:

Cited. 217 C. 371; 231 C. 756; 232 C. 559; 234 C. 182; 235 C. 185; 239 C. 144. Default in declaratory judgment action does not bar suit under statute. 247 C. 331.

Cited. 28 CA 145; 35 CA 94; judgment reversed, see 235 C. 185; 42 CA 177; 44 CA 220; 58 CA 39. Collateral estoppel cannot be asserted against an insurer in action brought pursuant to section; court found insurer bound by final judgment against insured that included finding of negligence. 69 CA 507.

Cited. 42 CS 164.

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Notes of Decisions

Cited in 64 cases (20 in the last 5 years), 1992–2026 · leading case: Tucker v. Am. Int'l Grp., Inc., 936 F. Supp. 2d 1 (D. Conn. 2013).

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Tucker v. Am. Int'l Grp., Inc., 936 F. Supp. 2d 1 (D. Conn. 2013). · cites it 40× “# 126), Tucker has included the following claims: breach of contract; breach of the implied covenant of good faith and fair dealing; a claim to recover as a subrogee of JRE under Connecticut’s direct action statute, Conn. Gen. Stat. § 38a-321; violation of the Connecticut Unfair…”

Dacruz v. State Farm Fire & Cas. Co., 846 A.2d 849 (Conn. 2004). · cites it 16× “DaCruz, bars the plaintiff, under principles of collateral estoppel, from holding State Farm liable, pursuant to General Statutes § 38a-321, 1 for damages awarded pursuant to *678 a judgment obtained by the plaintiff against the insured.”

Home Ins. v. Aetna Life & Cas. Co., 663 A.2d 1001 (Conn. 1995). · cites it 10× “” General Statutes § 38a-321 provides in relevant part: “Upon the recovery of a final judgment against any person, firm or corporation by any person *190 .”

Heyman Assocs. No. 1 v. Ins. Co. of Pennsylvania, 653 A.2d 122 (Conn. 1995). · cites it 10× “ge for property damage claims, and that the defendants have failed to assume their obligation under the policies to defend and indemnify the plaintiff; (2) the defendants waived any defenses to coverage that they may have had because they failed to provide the plaintiff with…”

Dacruz v. State Farm Fire & Cas. Co., 794 A.2d 1117 (Conn. App. Ct. 2002). · cites it 21× “In this action, which was commenced pursuant to General Statutes § 38a-321, 1 the plaintiff, David J.”

Samelko v. Kingstone Ins. Co., 184 A.3d 741 (Conn. 2018). · cites it 8× “The plaintiffs were subrogated to the rights of the insured under the policy issued by the defendant pursuant to General Statutes § 38a-321 1 and brought this action directly against the defendant to recover damages.”

Black v. Goodwin, Loomis & Britton, Inc., 681 A.2d 293 (Conn. 1996). · cites it 7× “The plaintiffs *149 amended five count complaint contained three common law claims, breach of contract, negligence and bad faith, and two statutory claims, one for violation of General Statutes § 38a-321 7 and a second for violations of the Connecticut Unfair Trade Practices Act…”

Buell Indus., Inc. v. Greater New York Mut. Ins., 791 A.2d 489 (Conn. 2002). · cites it 3× “In Verdón, wherein we interpreted Connecticut’s direct action statute, the issue was whether “a decrease in the value of an estate caused by legal malpractice is ‘damage to the property of any person’ for purposes of General Statutes § 38-175 [now § 38a-321] . . . ,” 16 Ver *542…”

Nash Street, LLC v. Main Street Am. Assurance Co., 337 Conn. 1 (Conn. 2020). · cites it 7× “In this case, brought under the direct action statute; see General Statutes § 38a-321; the plain- tiff, Nash Street, LLC, appeals from the judgment of the trial court, which granted the motion for summary judgment filed by the named defendant, Main Street America Assurance…”

Munroe v. Great Am. Ins., 661 A.2d 581 (Conn. 1995). · cites it 6× “The defendant is correct that, in statutes other than § 38a-343, the legislature has undertaken, in so many words, to distinguish between cancellation on the one hand and annulment or rescission on the other.”

Carford v. Empire Fire & Marine Ins., 891 A.2d 55 (Conn. App. Ct. 2006). · cites it 6× “See General Statutes § 38a-321. 6 Because there was no contractual *47 relationship between the parties, nor any judgment leading to subrogation, the defendant owed no duty of good faith and fair dealing to the plaintiffs.”

Hilario's Truck Ctr., LLC v. Rinaldi, 193 A.3d 683 (Conn. App. Ct. 2018). · cites it 4× “If a towing company renders services after an accident, other avenues exist for the towing company to seek recovery for those services. We may presume that in many instances, the insurance company will pay for the services if the policy provides for such coverage.”

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