Reading And Understanding An Insurance Policy

Life insurance lawyers, disability lawyers, auto policy lawyers, homeowners policy lawyers, and any other type of insurance lawyer needs to be able to read an insurance policy and know how the Courts interpret policies.

A principle that has particular impact is the rule that insurance policies are strictly construed in favor of the insured to avoid excluding coverage.  This is stated in the 1984, Texas Supreme Court opinion styled, Puckett v. U.S. Fire Ins. Co.  Exceptions or limitations on liability are strictly construed against the insurer and liberally in favor of the insured.  This is illustrated in numerous cases from the Texas Supreme Court – 1) the 1991, opinion, National Union Fire Ins. Co. v. Hudson Energy Co., 2) the 1987, opinion, Barnett v. Aetna Life Ins. Co., 3) the 1982, opinion, Blaylock v. American Guar. Bank Liab. Ins. Co., 4) the 1977, opinion, Glover v. National Ins. Underwriters, and 5) the 1896, opinion, Brown v. Palatine Ins. Co.

Stated another way, “An intent to exclude coverage must be expressed in clear and unambiguous language” according to the 1993, opinion styled, State Farm Fire & Cas. Co. v. Reed.

This rule does not apply when the term in question is susceptible of only one reasonable construction.

The rule is related to the ambiguity rules.  Once an exclusion that the insurer relies on is narrowly construed, a court is more likely to consider an alternative interpretation that provides coverage to be reasonable.

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