For this blog and for other reasons, I read a ton of insurance coverage cases. On most days, I at least take a look at every coverage case in the country published the day before by Westlaw. Out of all of those, my favorite type of cases to read are the ones about ambiguities in a policy, because it’s like listening to a debate over who are the five greatest centers in the history of the NBA: you can have your own opinion, but you never know what different courts will say.
One such case is Discover Property & Casualty Insurance Co. v. Beach Cars of West Palm, Inc., 2006 WL 1476061 (Fla.App. 4 Dist. May 31, 2006). The facts are pretty simple. A business had a garage coverage policy, and sold a car during the policy. After the policy period, the car was involved in an accident. Now, as a matter of insurance coverage theory, everyone knows that in this situation what is relevant is when the accident occurred, not the precursor acts, right? Perhaps. But the court found that the policy didn’t say that — it did not expressly limit itself to damages that occurred within the policy period. Remember that, for an ambiguity to exist, all that needs to happen is that each side is able to offer a reasonable interpretation of the policy. If there are two reasonable interpretations, the court decides against the drafter and the insurer loses.
I think the court’s reasoning was pretty good. The case is only a few pages long — read it and see if you agree or disagree. Here’s a link to the case to make it easy.