We are continuing our discussion of three Florida Supreme Court decisions handed down earlier this month. As we said in our last post, insurance companies did not prevail in any of the cases.
The first case involved a medical provider and an auto insurance company. The court's decision turned on the insurance company's failure to state in the policy that it would be using the state-approved calculation for reimbursements.
That decision touched on how courts interpret the language of insurance policies. Generally, courts have as little patience with jargon and legalese as consumers do. Insurance policies are supposed to be written in "plain language," with words meaning what they always mean; when something has a special meaning, the policy is supposed to make that meaning clear.
Plain language is not just about word definitions, though. It is also about sentences and paragraph construction. For example, we learn in basic composition classes that a writer should be specific: "Dick found Spot. He was hiding behind the bushes when he found him." Was it Spot or Dick who was hiding in the bushes?
The same if true in an insurance policy, especially the insurance policy at the center of a class action suit and at the center of the second Supreme Court decision. The question for the court was whether an automatic benefit increase in a home health care policy applied to the daily benefit alone or to the daily benefit, the lifetime maximum benefit and the per occurrence maximum benefit.
The court concluded that the language of the policy was ambiguous. The rule is that when a policy is ambiguous, the court liberally construes the policy in favor of coverage and "strictly against the insurer."
The decision is a major loss for the insurance company. The automatic increase will apply to benefit limits in all three categories for every policyholder in the class.
We'll finish up the discussion with the third and last decision in our next post.
Source: Flagler Live, "Florida Supreme Court Again Hammers Insurance Industry in Three Rulings," July 4, 2013