Chip Merlin frequently stresses the importance of reading the whole insurance policy when determining whether there is coverage for the relevant property damage. The failure to do so was highlighted in a recent case,1 where a Pennsylvania federal court stated it could not ignore the specific terms of an insurance policy merely because the insured may not have fully read the policy.

In that case, an insured sued his homeowners insurer, alleging it failed to pay what he perceived as the full estimate of water damage resulting from a broken pipe in his house. While the insured received payment for a twenty-four-foot portion of slab repair to access and replace a drain line under the kitchen floor, he claimed his insurance company’s failure to pay an additional fifteen feet of slab repair to the main drain was a breach of the insurance policy. The insurance policy contained an endorsement requiring the insurance company to pay for repairing only those areas in the house necessary to access the specific defect in the appliance causing the water damage. Nevertheless, the insured contended his insurance company should pay for the additional slab repair, utilizing a sentence of the insurance policy that had been deleted by the endorsement.

The court ultimately ruled that the insured failed to state a claim for breach of the insurance policy because he conceded the endorsement was in effect at the time of the loss. Consequently, the court would not read out the endorsement. Rather, the court was obligated to interpret the policy with the endorsement read into it and, therefore, could not ignore the specific terms of the endorsement because the insured may not have fully read the policy.
1 Boring V. State Farm Fire & Cas. Co., No. 19-1833, 2019 WL 3774191 (E.D. Pa. Aug. 9, 2019).