The words on the page of the insurance policy matter and are very important to both parties to the agreement. Since the insurance company drafts the policy, if there is any ambiguity in the terms it writes and selects, ambiguity and interpretation will be resolved in the policyholder’s favor and in favor of coverage. However, some Florida courts have allowed insurance carriers to present extrinsic evidence, such as internal operating guidelines, to clarify or explain ambiguous policy language.

This will likely change since the Florida Supreme Court recently held that if there is an ambiguity in policy language, it is construed in favor of the policyholder and coverage without considering extrinsic evidence.1 

In a case to answer a question certified by the Eleventh Circuit Court of Appeals, the Florida Supreme Court made it clear:

[W]here the provisions of an insurance policy are at issue, any ambiguity which remains after reading each policy as a whole and endeavoring to give every provision its full meaning and operative effect must be liberally construed in favor of coverage and strictly against the insurer.

The Court also stated:

Florida case law cited by Washington National that allows extrinsic evidence to clarify latent ambiguity in contracts other than contracts of insurance does not govern the resolution of the question now before this Court. Moreover, the ambiguity in this case is patent rather than latent, in that it appears on the face of the contract.

Florida courts hearing insurance policy coverage cases must consider policy words and not other props and extrinsic evidence to try to make sense of the words the insurance carrier wrote. An insurance carrier has the burden to clearly define circumstances limiting or excluding coverage, and should it fail to do so, ambiguity is resolved in favor of its customer and coverage. Insurance carriers should not be given the chance to offer explanations regarding its intended interpretation of the policy; intended coverage should be clear when policies are issued.


1 Washington National Insurance Corp. v. Ruderman, No. SC12-323 (July 3, 2013).

 

  • Gary Greenfield

    Finally, some common sense! An insured shouldn’t have to have a law degree in order to understand what coverage their policy provides, and it should be clear and evident in whatever they receive as a copy of their policy.

  • SHIRLEY HEFLIN

    Dear Attorney Marker:

    The sad part about this topic is that no matter what the Fla. Supreme Court says and no matter that this has been the “law of the land for ages” (i.e., ambiguities are construed in favor of the INSURED) IT JUST DOESN’T MATTER. INS. COMPANIES ARE GOING TO DO WHAT THEY WANT TO DO FOR AS LONG AS THEY CAN GET AWAY WITH IT AND FOR AS LONG AS THEIR MONEY (excuse me – the INSURED’S MONEY)finances same!

    Sure, ultimately, the person/entity doing “right” prevails (usually) however, you’re talking years and years of litigation. Many/most insured/claimants are not solvent enough to financially survive the aftermaths of a devastating loss; indeed, that’s why they bought insurance and then to find out following a loss that they are not only fighting the aftermaths of a loss like a hurricane, fire, etc., but also their very own insurance company is a tough pill to swallow and certainly a tough one to survive.

    SHIRLEY HEFLIN
    (Tampa, FL)