This month’s case is one that deals with the frequently litigated dilemma of coverage intent. In this dispute, a woman was injured while a passenger on an all-terrain vehicle (ATV). Specifically, she was struck by a tree branch. She sued the ATV’s owners. The owners’ insurer denied their claim.

The insurance company’s denial under the homeowners policy it issued was based on an exclusion it contained regarding land motor vehicles. Initially a court found in favor of coverage, citing ambiguous language.

Click below to see the how the situation changed once it was scrutinized by a higher court.

Please click on the link to get more details on the court case.

Insurance consumers may feel the ubiquity of insurance, but, at the same time, they may be confused by its wide variety. While not as numerous as the lines of business found in commercial and specialty insurance, personal lines also contains myriad offerings.

While the featured case involves homeowners insurance, personal lines includes other types of protection. Individuals and families may have their coverage needs addressed by personal auto, renters, condominiums, fine arts, dwelling, motorcycle, umbrella, non-owned auto, recreational vehicle, collectibles, antiques, musical instruments, watercraft and more.

Traditionally, insurance policies are designed to address specific, significant areas that are exposed to being damaged, destroyed or activities that create liability for damage or loss caused to other parties. A given policy’s language expresses their coverage intent. Insurer’s go to great lengths to make their intent, distinct so that different policies don’t provide overlapping insurance protection.

Click here for information on exclusions used in homeowners insurance for clarifying what coverage it provides. It is from the Residential Insurance Section of PF&M found in Advantage Plus.

As just discussed, different types of insurance policies are designed to meet a distinct set of loss situations for different types of property and liability. However, coverage intent is often challenged. An old adage is that we fail to see what is against our interest to see. Certainly, a need to handle a significant financial obligation may influence how policy wording is interpreted.

In our featured case, the dispute involves a policy exclusion on motorized vehicles. The family being sued over an injury suffered by a passenger on an all-terrain vehicle they owned sought coverage. They argued that the exclusion’s exception for certain vehicles was vague and coverage should apply. A higher court disagreed and allowed the exclusion as a basis to deny the claim.

Though the insureds sought a different result, the intent of the homeowner policy was, eventually, preserved. Allowing coverage would have resulted in a homeowner policy responding to a motorized vehicle loss. In the end, the larger good is served when policy obligations are maintained as designed.

Click here to see information on various types of coverage that may be used to address needs that are related to owning residential and other non-business property as well as personal liability. It is from the personal risks section of Coverages Applicable found in Advantage Plus.

An assumption regarding insurance disputes that serves best is that they involve parties that, even amid their disagreement, are pursuing their aims in good faith. While there certainly are instances where litigants are disingenuous, most arguments are made according to their best understanding of the situation.

Often lack of information is a culprit that triggers lawsuits. Having more information can have the opposite effect, preventing litigation. Being more knowledgeable could have resulted in acceptance of the initial denial or, perhaps, have pointed out the need for purchasing coverage that would’ve handled the loss.

It is important to develop comprehensive information about clients in order to, at a minimum, better inform them of the risks they may face. Better still, armed with greater knowledge, clients may be open to securing additional, appropriate protection.

Click here to see one of the many letters available to secure important information from personal lines clients. It is from the Account Development – Personal section of Business Building Letters found in Advantage Plus.