Florida’s First District Court of Appeal recently underscored a long-held legal principle regarding the way courts are to interpret ambiguous language in auto insurance policies with its ruling in Spaid v. Integon Indemnity Corp.
Citing the 1997 case of Berkshire Life Ins. Co. v. Adelberg, the court reiterated that insurance companies, as writers of the policy, are bound by the plain language interpretation of the policy, which is to be “construed liberally in favor of the insured” and against the insurer.
The Miami personal injury attorneys understand issues of this nature can be avoided when insurers are careful to edit policies for potential conflicts. As this case shows, even the clear intention of the insurer is not as important as the exact words in the policy. It’s important to note in weighing these cases the court will be placing itself in the shoes of the insured to determine what an ordinary person would understand and infer based on the plain language contained therein.
In the Spaid case, the plaintiff was involved in a crash in February 2011 in which she was seriously injured and racked up medical bills in excess of $10,000. According to the terms of the personal injury protection policy (PIP) provided by her auto insurance company, the maximum liability payout for an accident was $10,000. This was made clear in that portion of the policy.
However, in the extended PIP plan, for which she paid extra, there was no mention of a limit of liability with regard to her medical bills. Neither was there any mention of it in the Declarations portion of the policy.
In fact, there was an addendum in the extended PIP portion that indicated the percentage of medical expenses covered was 100 percent.
When the insured requested her excess medical bills be covered, the insurance company denied the request. The plaintiff responded by filing a lawsuit against the insurer.
The plaintiff requested summary judgment on the grounds that the extended plan clearly stated her medical bills were to be 100 percent covered. She added that to whatever extent the policy was ambiguous, the interpretation should be tilted in her favor, as per the Berkshire ruling.
The trial court rejected her argument, and she appealed.
The insurer argued that the extended plan does allow for recovery of 100 percent of an insured’s medical expenses – up to $10,000. But that’s not what the extended plan stated, and therein lies the basis for the appellate court’s reversal of the trial court’s ruling.
The appellate court agreed with the plaintiff that the wording of the extended plan established ambiguity with regard to how much medical expenses were covered. The court noted the insurer “may well have intended” to curb liability for medical expenses at $10,000. However, citing the 2013 ruling in Washington Nat’l Ins. Corp. v. Ruderman, which addresses how insurance policies are to be constructed, the court held the insurer had a responsibility to express that intention clearly and absent any ambiguity.
Because this insurer failed to do so, the court granted summary judgment in favor of the plaintiff, meaning 100 percent of her medical bills will be paid by the insurer.
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