Insurance has been woven into the tapestry of human society dating back to antiquity. At its core, an insurance policy is an indemnity agreement between an insurance company and an insured person. The insurance is subject to the same rules that govern other contracts unless these rules are specifically modified by law. 1
When courts interpret an insurance contract, they follow the generally accepted rules of construction, which means that insurance contracts are interpreted according to their clear meaning, with ambiguities that are usually interpreted against the insurer. 2 When analyzing an insurance contract, it is important to examine the contract as a whole. Where the language of a policy is clear and unambiguous, courts must interpret the policy on the basis of its clear meaning. 3
Issues still often arise where the parties disagree on the meaning of policy provisions ̵
Modern insurances are adhesion agreements. 5 At law school we called these "take it or leave it" Contracts. This means that the insured must accept or reject an insurance in its entirety according to what the insurer provides, with little authority to negotiate the provisions of the insurance contract. Because insurance is an adhesion agreement, it is even more important that insurance contracts can be understood by ordinary people and not just insurance personnel. Courts and commentators constantly emphasize the need to write insurance policies in simple language rather than complicated technical jargon. 6
To protect the policyholder, many jurisdictions now respect the insured's reasonable expectations of insurance coverage. 7 This principle states that policy provisions should be designed in a way that policyholders can understand. The principle of reasonable expectation has motivated many decisions that grant insured coverage in circumstances where the insurance language seemed to deny benefits. In summary, the principle of reasonable expectation works for the policyholder's protection. Interpretation of contracts that benefit the insured still does not guarantee that an insured will recover regardless of the wording of the contract as an insurance contract must be reasonably interpreted. 8 Legal interpretation must follow the policy language as a correct presentation. of the actual intention of the parties. 9 Freedom of contract should still retain the validity of the contract if the insured had obvious notice and sufficient opportunity to evaluate the policy error. 10
Former Florida courts allowed insurance companies to present external evidence, such as internal guidelines to clarify or explain ambiguous policy language. However, the Florida Supreme Court changed this by stating that when an insurance is ambiguous, the provision must be interpreted strictly against the insurer and in favor of coverage, without considering external evidence that could be used to possibly clarify the ambiguity: 11
[W] the provisions of an insurance policy, any ambiguity remaining after reading each insurance policy as a whole and striving to give each provision its full meaning and operational effect must be interpreted voluntarily in favor of coverage and strictly against
Florida case law cited by Washington National that allows external evidence to clarify latent ambiguity in agreements other than insurance contracts does not regulate the resolution of the issue now in this court. Moreover, the ambiguity in this case is patent rather than latent in that it appears on the front of the agreement.
This means that Florida courts dealing with insurance coverage cases must consider policy words and not other external evidence to try to reveal the meaning behind the words developed by the insurance company. The insurance company has a burden to clearly define the circumstances that limit or exclude coverage. Insurance companies should not be given the chance to provide explanations for their intended interpretations of the policy. instead, the intended coverage should be clear when the policy is issued. This decision to prevent the use of external evidence was a significant victory for Florida policyholders.
1 J. Appleman, Insurance Law and Practice §2108 (rev. Ed. 1969 & Supp. 1981).
2 Swire Pacific Holdings, Inc. v. Zurich Ins. Co. 845 So. 2d 161, 165 (Fla. 2003).
3 State Farm. Mut. Car. Ins. Co. v. Menendez 70 So. 3d 566, 569 (Fla. 2011).
5 Restoration 1 of Port St. Lucie vs. Ark Royal Ins. Co., 255 So. 3d 344 (Fla. 4th DCA 2018).
6 Reutershan & Kunze, Who wants a new insurance? 24 Drake L. Rev. 753 (1975).
7  Bandura vs. Fidelity & Gaur. Life Ins. Co. 443 F. Supp. 829, 832 (W.D. Pa. 1978).
8 Young, Lewis & Lee, Insurance Contract Interpretation Problems and Trends 1975 Ins. L.J. 71, 77 (1975).
9 Excelsior Ins. Co. v. Pomona Park Bar & Package Store 369 So.2d 938, 942 (Fla. 1979).
10 F. Pollock & F Maitland, History of English Law 233 (2d ed. 1968).
11 Laundry. Nat & # 39; l Ins. Corp v. Ruderman 117 So. 3d 943, 95 (Fla. 2013).