A coverage dispute can happen for a variety of reasons. Sometimes, the policy language is not clear enough to determine what coverage applies. To limit coverage or to apply an exclusion, the language in the policy must be “clear and unambiguous.” If there is any ambiguity in the Policy, it must be interpreted in favor of the insured. Accordingly, a policy may contain language that the insurance company attempts to apply to limit or exclude coverage, but the language may not actually apply to limit or exclude coverage. This could lead to the insurance company wrongfully denying or limiting your claim.
Further, state statutes may require insurance policies to have certain coverage. If the policy does not have the coverage that the statute requires, the statute “rewrites” the policy to provide the required coverage. In this case, the coverage is available even though the insurance company may tell you it is not.
Similar to different states having different statutes for insurance coverage, the different state courts have different precedents that affect coverage. For example, many policies provide access to appraisal (a valuable tool to resolve some kinds of disputes) when the dispute is over the “amount of loss.” In some states, the courts have determined that only disputes over the cost of necessary repairs are a disputed “amount of loss.” In Minnesota, the courts have determined that a dispute over the “amount of loss” includes determining how much property was damaged, what repairs are necessary to repair the damage, and the cost of necessary repairs. An insurance adjuster who handles losses in multiple states may not be aware of these different applications between the states and may wrongfully deny your right to appraisal or other policy coverages.
Overall, insurance companies can be wrong when they state what is or is not covered by their policy. Insurance companies may interpret their policy in a way that benefits the insurer the most and you the least. Further, insurance companies, or the adjuster handling your loss, may not understand the effects of your state’s law on the policy coverage. It is important to independently assess the coverage of the Policy and not to simply accept the insurance company’s position on coverage.
If you have experienced damage to your business or residential property and the insurance company is denying you benefits, you should contact Anthony Remick or any of the Hellmuth & Johnson Property and Business Insurance Claims Law attorneys to assess your rights.
