Mansell, Engel & Cole

Blowback on this court’s insurance-linked decision unsurprising

We delved into a judicial decision involving an insurance policy in a post from last month, noting that many people would find fault with it and question the heavy onus it seemingly places upon policyholders. Our October 26 entry stressed that, while insureds certainly must familiarize themselves with key policy points, they can hardly be expected to grasp fine-print subject matter equally as well as insurance industry experts.

Indeed, we stated that “it is close to impossible for most intelligent people to fully comprehend every aspect of an insurance policy.” Moreover, insurers bank on that reality; in fact, some bad-faith actors routinely rely upon it to exploit policy loopholes that lead to delayed or denied coverage.

Readers of our Oklahoma City pro-policyholder insurance law blog can peruse the aforementioned case via the above link. We will merely note here that the cited court refused to allow a couple’s denied claim to go forward, stating that it was time-barred. The tribunal ruled that the husband and wife had a duty to fully familiarize themselves with their policy at the time they purchased their policy, not when they were later informed of coverage denial.

Insurers will of course laud the court’s ruling, be encouraged to issue denials based on it and likely cite to it in future matters.

Is it really fair, though? As we suspected, the case ruling has been quickly criticized in its wake. The writer of a National Law Journal article notes, for example, “that even insurance companies don’t always understand the policies they wrote.”

The bottom-line takeaway from the case might reasonably be that an insured should timely read a policy and then consult with a proven insurance law attorney to discuss any questions or concerns regarding it.

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