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Property Insurance Provisions Must Be Construed in Favor of Coverage

Wed Feb 14th, 2018 on     Property Insurance,    

If you are challenging the wrongful denial of your property insurance claim, the insurer is likely to assert that the language in the insurance contract is rather ambiguous, and that it should be interpreted in a manner that favors them.

For example, suppose that your property insurance contract includes various provisions that exclude lightning damage from coverage.  A tree near your house is hit by lightning, which results in a fire.  The fire then spreads to your house, causing it to burn down.  Would you be entitled to make a property insurance claim, given the exclusionary provision at-issue?  The insurer is likely to argue no.  On the other hand, the provision is rather ambiguous with regard to the chain of causation.  It could be argued that the damage was not directly caused by the lightning, but instead by fire, which is covered.

Ambiguity has often been used by insurers to entice policyholders into signing, only later to be construed in a manner that retracts coverage, thus minimizing the potential liabilities for the insurer.  Fortunately, Florida case law favors policyholders in the interpretation of ambiguous policy language.  Let’s take a quick look.

Ambiguous Property Insurance Provisions Must Be Construed in Favor of Coverage

In Florida, ambiguous provisions — where true ambiguity exists — of an insurance policy must be liberally construed in favor of the policyholder (coverage), and strictly construed against the insurer.  As the policyholder, this is highly protective and is likely to benefit you when it comes to litigation on the basis of wrongful denial.  If the insurer denied your claims on the basis of their unique interpretation of an ambiguous provision, then you can challenge their denial pursuant to an interpretation of the ambiguous provision that favors the application of coverage.

Extrinsic Evidence May Not Be Considered

Not so long ago, Florida courts sometimes allowed insurers in property insurance disputes to introduce extrinsic evidence to help resolve ambiguous language in the insurance contract.  In recent years, however, case law has made it clear that extrinsic evidence may not be introduced for the purpose of clarifying ambiguity in the property insurance contract — instead, the ambiguity must be resolved through consideration of the contract language itself.  The decision by Florida courts to disallow extrinsic evidence is generally beneficial for policyholders in property insurance disputes, as extrinsic evidence is frequently supportive of the insurer (who may have a range of business and marketing evidence, such as insurance guidelines, that favor their interpretation of the contract language).

Contact an Experienced Miami Property Insurance Lawyer

Here at Ver Ploeg & Lumpkin, we have successfully represented policyholders in property insurance coverage disputes and other insurance disputes for over two decades.  Our attorneys have worked on either side of insurance litigation, and thanks to this unique perspective, are particularly well-positioned to secure maximum compensation for our clients (and counter the strategies commonly utilized by insurance defense counsel).

Call (305) 577-3996 today to schedule a free consultation with an experienced Miami property insurance lawyer here at Ver Ploeg & Lumpkin.

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