Insurance Coverage Blog

This is a relatively small article I wrote for the OADC magazine, the Oregon Association of Defense Counsel.  I'm not actually a member of that organization, but one of my partners is on the Board of Directors, so I like to help out when I can.  Some of the information was contained in the much larger anti-concurrent cause article I wrote for the recent New Appleman on Insurance: Critical Issues in Insurance Law, but this has more of a focus on Oregon's plain English insurance law.  Oregon, of course, is where I live.  If I had to write an article applying to all 50 states, I doubt much would change about my conclusions.  

Nice article. This is basically the discussion I was having in the comments of one of your recent posts with JUSTUS. As I was saying to him, simplicity =! clarity. Insurance policies today are the result of decades of coverage litigation (and legislation and negotiation with insurance commissioners). Older policies seem simpler to me... they're certainly shorter! Compare a CGL coverage form from the 1950s to a current version. One is a few pages long and the other is a tome.

It sucks for the consumer - particularly the consumer who really does try to read and understand their policy. I don't know how to fix it. I suppose we could have the coverage dictated by the gummint and have the actuaries come up with the pricing, but something tells me that's a bad idea.

Sesame Street English is not precise. A contract needs precise language that both parties understand.

Before the "plain language" laws we had over 100 years of court decisions explaining every word in every insurance policy. Corrections were made and clarity existed.

Plain language is seldom plain and often unclear. Only a plaintiffs' lawyer would like it because it makes it possible to argue that everything is covered if he or she plays with the language long enough.

Time to graduate from Sesame Street.

Barry: is that why 10,000 homeowners had to sue their insurance companies? Hard for "The Count" on Sesame Street to count that high.

Hey, I just read your cv. You must be familiar with the Northridge insurance cases, and the OKLA tornadoes, both of which begat the Katrina follies. Katrina had 4 hours of wind, then the water, altered engineering reports, insurance companies that paid one homeowner for wind (if he stayed in the house and witnessed it) and not the next door neighbor who fled the storm, as well as the usual slow pay, sue us mentality brought on by the McKinsey report purchased by all the big companies.

Perhaps,

Clear and well reasoned policies avoid lawsuits. Simple language policies cause confusion.

Insurance companies make mistakes in catastrophes -- it is the nature of the beast -- and that is why some suits are filed. Others -- as Mr. Rossmiller has pointed out -- are the result of some lawyers playing with the language to make coverage that was never intended by either party to the contract at the time it was made.

Yes, I saw many of the cases that ran from the earthquake Mr. Cowbell, including about 30% of which involved some fraud. I know you can't make an earthquake but it is not hard to increase the amount of the claim to cover a high deductible. If caught you might actually go to jail.

Insurance is a contract -- nothing more. If it is written in imprecise language it is difficult to interpret and the unintended consequence of the law was to make more litigation rather than what was intended.