In my experience as a Georgia personal injury and serious accident lawyer, insurance policies are most often poured over by insurance companies before they are ever issued and it is difficult to get courts to find ambiguity in these policies. As an individual or small business, it is important that you read your policy terms and understand them before an accident occurs.
Last week, the Arkansas Supreme Court held that a particular policy of insurance was ambiguous and that an insurance carrier could not avoid paying twice what it expected to pay.
The court was deciding a case that involved a lawsuit resulting from a tragic and serious accident in which passengers were killed. In the accident that took place in 2009, a bus driver ended up in a collision with a car that resulted in death and serious injury of passengers.
The police investigation found that the car driver was at fault in the accident, but that driver was underinsured. That meant the insurance proceeds were not enough to cover the tragic accident. The non-profit transportation company’s policy carried much higher coverage than the car driver’s policy and included underinsured coverage, for situations in which the other driver(s) did not have sufficient insurance.
As noted, the bus driver was driving on behalf of a non-profit transport company, which was insured by Philadelphia Indemnity Insurance Company. The insurance company was willing to pay the proceeds of its policy, which totaled $1 million in coverage. In what is called a complaint for interpleader, the insurance company essentially said, “we will pay the full amount of the policy” in exchange for no additional liability. They claimed that amounted to $1 million.
The intermediate appellate court said the insurance company was exposed to more than the $1 million the insurance carrier argued was all they should pay. But the passengers who had been injured and the administrators of the deceased passengers’ estates filed what are called counterclaims against the insurance company. They said they were entitled to a portion of the funds (and in fact additional funds) from the insurance company saying that the insurance policy provided for more coverage than the carrier claimed it was liable for under the policy terms.
The insurance company asked the court to accept that it had paid all that was required under their policy with their insured. But the appellate courts had held previously that when an insurance policy is ambiguous (meaning that it is subject to interpretation) it must be construed in favor of the insured. The court found that there was a notation in the policy that was not defined in the policy terms and that there were other terms that made the coverage amount unclear.
That meant the difference between the insurance carrier paying $1 million, as opposed to $2 million for the accident. In the opinion of the Arkansas Supreme court the policy terms were ambiguous and the carrier was liable for more coverage than it claimed saying: “We repeatedly have stated that if the language of a policy is susceptible to two interpretations–one favorable to the insured and one favorable to the insurer–then the interpretation most favorable to the insured must be adopted.”
Insurance companies are very experienced at avoiding payment of claims. It is a fact of their business model. If you have been injured in an automobile or other motor vehicle accident and have any questions about your insurance coverage or your ability to recover your medical and other damages from another driver, please contact Georgia injury attorney Charles Scholle.
As an Atlanta car crash and bus crash lawyer, he has the knowledge and experience to help victims get through the legal process successfully.