Whether you’re a policyholder in a health, disability, or property insurance plan, you may encounter, or have already encountered, some setback when it comes time to file a claim for benefits. Insurers are fundamentally incentivized to deny, undervalue, or mishandle claims so they can minimize their own costs. this is particularly true in situations where an important provision of the contract related to coverage is ambiguous and therefore open to interpretation.
In many cases involving an adverse determination by the insurer, the policyholder-claimant is caught off guard; after all, the policyholder may have interpreted an ambiguous provision very differently than the insurer.
Let’s look at how benefit disputes associated with such ambiguities are resolved.
interpretation of ambiguity in an insurance policy
If you think your insurance policy contains an ambiguous provision that the insurer is misinterpreting in an effort to deny you the benefits you are entitled to, then it is important that you do not despair; you do not need to resign yourself to the insurer’s decision. . Florida law imposes beneficial rules that protect you in circumstances where ambiguous insurance provisions are misunderstood or misused.
favoring the claimant
In Florida, ambiguous insurance provisions are construed strictly in favor of the insurance claimant: the courts must construe any genuine ambiguity against the interests of the insurance provider.
Suppose, for example, you own a property insurance policy and your plan contains an exclusion clause that is somewhat ambiguous. the clause may prevent you from obtaining adequate insurance benefits if the weather conditions causing the loss are not extreme. however, the plan may not adequately define what constitutes “extreme” weather conditions, leaving you confused as to how it will be interpreted.
Now, if your basement floods and sustains serious damage after a storm, the insurer may argue that the weather wasn’t “extreme” enough to warrant coverage. they can point to the fact that many other houses were not flooded, and it was the particularities of the structure (and the layout of the land) that allowed the flood to occur.
Given the ambiguity of the exclusion clause, however, the court would be required to interpret the ambiguity in your favor, entitling you to receive benefits for damages caused by the floods.
introduction of extrinsic evidence
It is important to note that in Florida, external (eg, extrinsic) evidence cannot be used to clear up ambiguity. For example, an insurer cannot claim that she clarified the ambiguity in a meeting with her insurance broker.
Courts must interpret the ambiguous provision using the language of the plan itself. this is intended to benefit the policy holder; Because of this rule, insurers have an incentive to write more specific and precise provisions that cannot be mistaken as ambiguous.
contact an experienced miami insurance law firm for guidance
see ploeg & marine, p.a. is a miami-based insurance litigation firm that has represented policyholders in a wide range of insurance disputes, including those involving complicated and/or ambiguous insurance provisions, for more than two decades. We have more than 25 employees across our various Florida locations and experts on staff to assist at every stage of the dispute process, from assessing losses to providing expert testimony on vocational or business matters.
Unlike many of our competitors, we are strong advocates of precise defense. We treat our clients as equal partners, and as such, we work closely to identify all the necessary information that will allow us to bring an effective civil action against the insurer (and possibly put the insurer at a disadvantage). Over the decades, our significant case results serve as proof of the effectiveness of this approach.
Call (305) 577-3996 today to connect with our miami insurance law firm and speak with one of our experienced attorneys for guidance.