As we have previously discussed on this blog, insurance policies can be difficult to interpret because provisions in one section of the policy might appear to conflict with language in another part of the policy. These potentially ambiguous provisions often generate disputes with conflicting opinions on how the provisions and language should be construed. Given that insurance carriers, insurance lawyers and judges can have dramatically divergent views on how these terms should be construed, it is predictable that policyholders typically need legal advice to understand such language in their insurance policy.
A recent case decided by the Fifth District Court of Appeals of Florida demonstrates the hyper-technical disputes make it imperative that an insured have an experienced property damage attorney when navigating a claims dispute. In Botee v. Southern Fidelity Insurance Company (“SFIC”), the insureds’ policy included all-risk coverage on the structure, Coverage A, subject to certain exclusions. One of the enumerated exclusions applied to coverage for losses resulting from “vandalism and malicious mischief, theft or attempted theft” when the subject property is left unoccupied for over a thirty consecutive day period prior to the loss. The policy also included named peril coverage, Coverage C for personal property. The covered perils included “vandalism or malicious mischief” and “fire or lightning.”
The facts were undisputed that the policyholders’ home was damaged by an intentionally set fire after the residence had been vacant for over thirty days. When the policyholders filed a claim, SFIC denied the claim alleging that arson was excluded as an act of “vandalism and malicious mischief.” The lawsuit filed by the insured argued that the policy language relating to fire did not impose a vacancy restriction like the one that applied to loss from vandalism and mischief. The trial court granted summary judgment for SFIC based on the position that the vacancy exclusion was unambiguous and that arson constituted vandalism and malicious mischief under the policy.
On appeal, the Fifth District began its analysis by observing that the only issues before the court were whether arson is encompassed within the “vandalism and malicious mischief” provision, and whether the policy was ambiguous. The court also observed that the term “arson” did not appear in the policy and that neither the terms “fire” or “vandalism and malicious mischief” were defined by the policy. Because the terms were not defined, the court observed the next step in the analysis was to determine the plain and ordinary meaning of the terms.
The court noted that “genuine inconsistency, uncertainty or ambiguity” must be construed according to the ordinary rules of statutory construction in terms favorable to the policyholder. However, the mere fact that terms were not defined or that a provision required interpretation did not necessarily make the provision ambiguous.
The insureds argued that the policy was ambiguous because the vacancy exclusion in Coverage A did not specifically refer to arson or fire. However, the court observed that most courts hold that the destruction of property by an act of arson is encompassed within the term “vandalism and mischief.” The appellate court also indicated that other states have concluded that vandalism included in all-risk policies includes arson when the policy failed to distinguish between “vandalism” and “fire.” The appellate court ultimately upheld the trial court finding that the policy was unambiguous.
This decision provides an example of the subtle distinctions in policy interpretation that can impact the outcome of a claims dispute. If you have questions about Florida property insurance claims, you are welcome to contact my Miami property insurance claims law firm. My law firm represents policyholders in claims disputes in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.