Insurance Company Gets "Creative" With Claim Denial
Long ago I read an article in a professional journal about insurance contracts, and how they are written. The basic point was that insurance companies will intentionally make the policy language ambiguous. When I say "ambiguous," I am not trying to sound like a fancy pants. In the legal world, something is "ambiguous" when it can be read two different ways, and both ways are reasonable. Why make something unclear?
It's pretty simple. Insurance is traditionally regulated by the states. Each state has its own insurance code, and an agency that enforces the insurance laws. If an insurance company is in one state arguing what a term in its own policy says, it can make a completely opposite argument in another state. Keeping things unclear makes that a lot easier.
Some states are better than others about regulating insurance. I would pick Washington over Oregon because in Washington, a policy holder can seek a remedy against the insurance company if it acts in bad faith. Oregon allows the consumer to report a violation to the state, but court remedies are more limited.
The Houston Chronicle recently reported on a case involving a fatal office building fire that killed three people. Great American, one of the insurance carriers, is arguing that the victims were killed by smoke, which is "pollution," and since liability for pollution is excluded in the policy, then there is no coverage.
As a recently elected official stated, this is a "teachable moment." First, if you are in the market for insurance, consider the fact that building owner, who had the insurance with Great American, disagrees with this position. Second, if you do buy insurance, take the time to wade through the exclusions. Third, it's a darned good thing to have the right to take an insurance company to court to enforce it's own policy if it is going to get this "creative."
